Sugar Prices Hit Record Highs Across India; Gujarat Retail Rates Touch ₹65-70 Per Kg Ahead Of Festive Season

Sugar prices have surged across India, with the national average retail rate reaching ₹52.30 per kg on August 18, up 13% year-on-year, while prices in several markets have climbed to ₹58-60 per kg. In Gujarat, the increase has been sharper, with regular sugar reportedly selling at around ₹60 per kg and refined sugar at ₹65 per kg, raising fears that retail rates could touch ₹70 during the festive season. 

The rally is being driven by tightening market supplies, falling inventories, festive-season buying and concerns over the availability of sugar before the next crushing season. The Centre has responded by cutting the permitted stockholding period for bulk consumers from 30 days to 15 days from September 1. 

Sugar Prices: From ₹44 To ₹60 Per Kg

The increase has been significant across the country.

Average retail sugar prices have risen from around ₹46.34 per kg previously to ₹52.30 per kg as of August 18, according to Consumer Affairs Ministry data. That represents a 13% year-on-year increase. However, actual market prices are considerably higher in several cities, with retail sugar selling at ₹58-60 per kg. 

In Mumbai, retail sugar prices have reached around ₹58 per kg, following an ₹8-per-kg increase in recent weeks. 

Wholesale prices have risen even more sharply. In major trading centres, rates that were around ₹4,400 per quintal about two months ago have moved towards ₹5,800 per quintal, an increase of roughly 32%.

In Kolhapur, Maharashtra, one of India's key sugar markets, wholesale prices climbed nearly 20% in August alone to around ₹5,350 per 100 kg. 

National Market Rates At A Glance

The gap between the national average and actual retail rates in several markets highlights how unevenly the price rise is being felt by consumers.

Gujarat Sugar Prices Jump From ₹41.50 To ₹60

Gujarat has witnessed a particularly sharp increase.

Regular sugar was priced at around ₹38 per kg earlier and had risen to ₹41.50 per kg on July 1. It has now reached approximately ₹60 per kg, while refined sugar is selling for around ₹65 per kg.

Traders say sugar is difficult to procure even at these elevated prices and are warning that rates could reach ₹70 per kg if the supply situation does not improve before the major festivals.

For comparison, ex-mill Gujarat prices on July 1 were around ₹4,001-4,031 per quintal for S/30 grade and ₹4,141-4,151 per quintal for M/30 grade, excluding GST. 

Why Are Sugar Prices Rising?

Several factors are converging to push prices higher.

Falling Stocks

The market is approaching the end of the current crushing season, with mill inventories declining. Industry and trade sources have raised concerns about opening stocks for the 2026-27 season.

One market estimate puts closing stocks by September 30 at around 3-3.3 million tonnes, potentially leaving one of the lowest stock cushions in years. 

Ethanol Diversion

A portion of sugarcane juice and B-heavy molasses has been diverted towards ethanol production, reducing the quantity available for sugar production.

The issue has become more significant as India continues to expand its ethanol-blending programme.

Festive Demand

Sugar demand traditionally rises between August and November as India enters its major festive period.

Sweet manufacturers, confectionery companies, bakeries, beverage producers and food-processing units are building stocks ahead of Raksha Bandhan, Ganesh Chaturthi, Janmashtami, Dussehra and Diwali.

Traders in Gujarat say the additional demand has intensified an already tight market.

Production Is Higher, Yet Supplies Remain Tight

The price surge has occurred despite higher national sugar production this season.

According to ISMA data cited in the supplied material, India produced around 349 lakh tonnes between October 1 and July 31, compared with 295 lakh tonnes during the corresponding period last year — an increase of more than 18%.

The sugar industry, however, has maintained that the recent price rise does not necessarily indicate an overall shortage of sugar.

ISMA and the National Federation of Cooperative Sugar Factories have said India has sufficient stocks to meet domestic requirements until the next season and have proposed starting the 2026-27 crushing season 10-15 days earlier to improve supplies ahead of the festive period. 

Centre Halves Stockholding Limit To 15 Days

The Union Government has tightened restrictions on bulk sugar consumers as prices continue to rise.

From September 1 to November 30, consumers using more than 10 metric tonnes of sugar a month will be allowed to hold only 15 days' stock, down from the earlier 30-day limit. The measure covers confectioners, sweetmeat sellers, soft-drink manufacturers, food processors and other institutional buyers.

The Union Government had introduced a 30-day stock restriction for dealers last month. The latest move comes as demand is expected to remain elevated through the festive season.

Government Checks Mills, Imports Also Being Considered

The Directorate of Sugar has also directed mills to ensure buyers lift purchased stocks within seven days of sale and warned against speculative practices, according to industry market updates. 

The Union Government is also considering limited duty-free sugar imports as one possible way of increasing domestic availability. Other options under consideration include adjustments to mill sales quotas and measures to increase supplies from port-based refineries. 

Any move to allow imports would be significant because India has not relied on overseas sugar shipments on a large scale for several years.

Sweet Makers Brace For Higher Costs

The price rise is already affecting sweet manufacturers and other businesses that use sugar as a major raw material.

With several festivals approaching, demand for sweets is expected to increase further. Higher sugar costs could squeeze manufacturers' margins or eventually translate into higher prices for consumers.

For households, meanwhile, the concern is straightforward: if supplies remain tight until the new crushing season begins, the current ₹58-65 per kg national market range and ₹60-65 per kg Gujarat rates could move even higher during the festive rush.