India blames low output, festive demand for sugar price surge

Sugar prices in India have surged from ₹48.18 per kg on July 20 to ₹58.20 per kg on August 21, prompting the government to curb hoarding and allow imports for the first time in nearly a decade. The Centre attributed the price hike to lower-than-expected domestic production, higher festive-season demand, and weather-related crop damage, not ethanol diversion. Production is estimated at 30.6 million tonnes, below the initial 34.35 million tonnes forecast. Sugarcane crops were hit by red rot and top borer diseases, alongside waterlogging from excess rainfall. Ethanol diversion has declined from 12% of production in 2022-23 to about 9% in 2025-26, with nearly three-fourths of ethanol now derived from grains, particularly maize.