The government is considering a series of measures to keep sugar prices under control ahead of the festive season, including the possibility of allowing limited duty-free imports, according to media reports.
The Food Ministry is also examining restrictions on the quantity of sugar that bulk traders can hold and changes to the monthly allocation of sugar by mills, as demand typically rises between August and November.
The discussions come as retail sugar prices have increased sharply. According to the price monitoring cell of the Department of Consumer Affairs, the average retail price of sugar stood at Rs 52.3 per kg on Tuesday, nearly 13 per cent higher than a year earlier. Prices have risen by more than 9 per cent over the past month.
The government has already introduced measures aimed at preventing hoarding and speculative trading ahead of the period of stronger seasonal demand.
Stock limits for sugar dealers have been in force from August 1 and will remain applicable until November 30, 2026. Dealers are required to disclose their stocks and update their holdings every week.
Under the order, traders cannot hold more than 4,000 quintals of sugar for over 30 days from the date of receipt.
The Food Ministry is also carrying out physical verification of stocks at sugar mills to assess actual inventories and improve transparency across the supply chain.
Officials are examining whether further restrictions on bulk traders and changes to monthly sugar allocations from mills could help ensure adequate supplies during the festive period, reported Financial Express.
Despite the recent rise in retail prices, the industry has said that domestic supplies remain sufficient.
“Sugar supply position for the coming months remains comfortable, and there is no fundamental concern regarding availability in the domestic market,” Deepak Ballani, Director General of the Indian Sugar & Bio-Energy Manufacturers Association (ISMA), told FE.
Ballani said the recent rise in sugar prices was not supported by underlying demand and supply conditions.
ISMA estimates that opening stocks for the 2026-27 sugar season, which runs from October to September, could be around 3.5-4 million tonnes (MT). The industry body considers this level adequate to meet domestic consumption requirements.
Opening stocks stood at 5 MT on October 1, 2025.
Officials pointed out that while the sugar season formally begins on October 1, output from new crushing operations generally reaches the market only towards the end of November or early December. As a result, stocks available at the start of the season remain important for maintaining price stability during the intervening period.
The government is also monitoring production prospects as uneven monsoon rainfall across major sugarcane-growing states has raised concerns about yields.
Maharashtra and Uttar Pradesh are among the key regions being watched, with sources indicating that rainfall patterns could affect sugarcane yields and influence market sentiment.
Industry sources have also pointed to lower yields linked to the early onset of flowering in sugarcane in Maharashtra and Karnataka.
Sugarcane sowing during the current season has covered 5.83 million hectares, representing a marginal decline from the previous year.
According to the third advance estimate issued in February 2026, the industry had projected net sugar production for the 2025-26 season at 29 MT, after accounting for 3.1 MT of sugar diverted towards ethanol. The final production figure for the season is expected to be released next month.
India's annual sugar consumption is around 28 MT.
The sugar industry has also highlighted the gap between market realisations and production costs.
Pan-India average ex-mill sugar prices were around Rs 39.5-40 per kg through June, according to the industry. Even after the subsequent increase, the average realisation for the season had reached only around Rs 40-40.5 per kg by the end of July.
This remained below the industry's estimated production cost of around Rs 42 per kg.
To strengthen availability during the upcoming festive period, the industry has recommended that sugarcane crushing for the 2026-27 season begin around 10-15 days earlier than usual. It has also sought financial support from the government.
The government is meanwhile weighing measures including limited duty-free imports as it seeks to balance consumer prices, domestic availability and the interests of sugarcane farmers. A 100 per cent basic customs duty on sugar was imposed in February 2018 to discourage cheaper imports and protect domestic cane producers.
