Sugar Rates To Come Down In Coming Days? Is Ethanol Blending Behind Price Surge? What ISMA Said

Amid a massive surge in Sugar prices across the nation that disturbs the kitchen budget for households, Sugar industry's apex body  Sugar and Bio-Energy Manufacturers Association (ISMA) on Monday asserted that the sweetener’s price in retail market are  expected to cool down in coming days following the government's decision— allowing imports and imposing stock holding limits on traders and bulk consumers. Additionally, the industry body dismissed claims that ethanol blending is responsible for the current sugar shortage.

What Causes Sugar Price Hike: ISMA Takes 

Sugar average all-India retail prices in the retail market stood at Rs 63.05 per kg, 29 per cent higher than Rs 48.73 per kg a month back. Meanwhile, the maximum retail price on Monday stood at Rs 75 per kg, while the model price was hovering at Rs 65 per kg, according to the government data.

• Average All-India Retail Price: Rs 63.05 per kg

• Maximum Retail Price: Rs 75 per kg

• Model Retail Price: Rs 65 per kg

• Ex-mill Prices: Rs 55-56 per kg

Addressing a press conference, ISMA President Niraj Shirgaokar pointed out factors that caused inflation in Sugar prices. He said speculative buying by traders and bulk consumers, as well as lower production than estimated, caused the current situation. 

"India does not have a sugar shortage. Our production and stock position remain fundamentally comfortable," he told reporters.

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Did Ethanol Cause Sugar Shortage? 

According to ISMA, in the 2025-26 marketing year (October-September), the country's net sugar production (after conversion to ethanol) is estimated to be around 2.79 million tonnes, while the opening stock was 5 million tonnes. The annual domestic demand is 280-285 lakh tonnes, and the country exported 800,000 tonnes of sweets before the government imposed the ban.

Shirgaonkar estimated closing stocks at around 3.5 million tonnes at the end of September.

"That is a healthy buffer against normal domestic demand, even after accounting for sugar diverted to ethanol," he added. 

Govt Allows Duty-Free Imports 

Earlier last week, the government''s duty-free import window and tightened stockholding limits. The ISMA president stated that the ongoing special crushing and early start of the new season will help boost domestic supply and increase regulatory prices.

Shirgaonkar explained that average retail prices have risen, but this increase is not due to a lack of availability.

He added that prices have begun to decline following the government's decision to allow duty-free imports of 1 million tonnes of raw sugar and impose stockholding limits on dealers and bulk customers.

He added that ex-mill prices have declined in recent days and are currently hovering around ₹55-56 per kg in two major sugar-producing states – Maharashtra and Uttar Pradesh.

"India's sugar balance is actually healthy. The recent price increase reflects weather effects, festive demand, global tightening, and – most importantly – speculative stocking, not any real supply gap."

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Are Mills Holding Stocks? 

When journalists asked the government if it was blaming the industry for driving up prices outside the mill, the ISMA president clarified that the industry was not involved in creating artificial shortages and raising rates.

However, he did not deny that some mills may be holding stocks and said the government was looking into it.