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Retail sugar prices in India rose from Rs 48.18 per kg on 20 July 2026 to Rs 55.70 per kg on 20 August 2026, according to the Ministry of Consumer Affairs, Food and Public Distribution.
The Ministry set out five reasons for the rise - lower domestic production, weather damage to the cane crop, festive-season demand, tighter global supplies, and speculation and hoarding - and expressly rejected the argument that diversion of sugarcane to ethanol was responsible.
Sugar output for the season is now estimated at about 30.6 million tonnes against an initial estimate of 34.3 million tonnes, the shortfall being attributed to Red Rot and Top Borer disease and to waterlogging from excess rainfall.
International prices moved from USD 474 a tonne on 30 June 2026 to USD 552 a tonne on 20 August 2026, a rise of more than 16 per cent.
The government's case is that the share of sugar diverted to ethanol has fallen from about 12 per cent in 2022-23 to around 9 per cent in 2025-26, and that roughly three-fourths of India's ethanol now comes from grains, mainly maize, rather than from sugarcane.
A sugar mill can turn cane juice or molasses either into sugar or into ethanol for blending with petrol. Because the same feedstock serves both, every tonne sent to a distillery is a tonne not sold as sugar, which is why a price spike invites the charge that the blending programme is squeezing the food supply. The government's rebuttal has two parts. First, diversion has been falling, not rising - from about 12 per cent of sugar in 2022-23 to around 9 per cent in 2025-26 - so it cannot explain a price rise that happened this season. Second, the feedstock base has shifted: roughly three-fourths of India's ethanol now comes from grains, mainly maize, rather than from sugarcane. The government also argues that diversion has been useful, because India structurally produces more sugar than it consumes, and the distillery absorbs the surplus that would otherwise sit in mill godowns and lock up working capital.
Simple Analogy: One field of cane feeding two queues - a sugar queue and a fuel queue. The complaint is that the fuel queue grew; the government's answer is that the fuel queue actually shrank, and in any case most of it is now being fed by maize from a different field.
The statutory minimum price a sugar mill must pay a cane farmer, announced by the Union government on the recommendations of the Commission for Agricultural Costs and Prices
Key: Fixed at Rs 355 per quintal for the 2025-26 season, linked to a basic sugar recovery rate of 10.25 per cent, with a premium for higher recovery
The floor below which mills may not sell sugar, meant to keep realisations high enough for mills to clear cane dues
Key: Rs 31 per kg, unchanged since February 2019, even as the FRP has risen - the gap industry bodies cite when asking for a revision
To blend ethanol with petrol to cut crude imports and give sugar mills and grain producers a second revenue stream
Key: Feedstock has broadened from sugarcane to grains, with maize now supplying the larger share of ethanol
To release supplies held back in the trade and check hoarding when prices spike
Key: A ceiling of 400 tonnes on sugar dealers across the country, in force until 30 November
GS Paper 3 > Issues of buffer stocks and food security; public distribution system; economics of animal rearing and cropping patterns; GS Paper 3 > Energy
General Awareness > Indian Economy and Agriculture
General Awareness > Economy, commodity prices and inflation
General Awareness > Current Events
The Fair and Remunerative Price (FRP) of sugarcane is approved by the
Answer: Cabinet Committee on Economic Affairs
With reference to the current trends in the cultivation of sugarcane in India, consider the following statements: 1. A substantial saving in seed material is made when 'bud chip settlings' are raised in a nursery and transplanted in the main field. 2. When direct planting of setts is done, the germination percentage is better with single-budded setts as compared to setts with many buds. 3. If bad weather conditions prevail when setts are directly planted, single-budded setts have better survival as compared to large setts. 4. Sugarcane can be cultivated using settlings prepared from tissue culture. Which of the statements given above is/are correct?
Answer: 1 and 4 only
The statutory minimum price payable by a sugar mill to a cane grower, announced by the Union government on the recommendation of the Commission for Agricultural Costs and Prices and linked to a basic sugar recovery rate
The percentage of sugar obtained from a given weight of cane; the FRP is set against a basic recovery of 10.25 per cent, with a premium for mills that do better
The floor price below which a mill may not sell sugar - distinct from the minimum support price for crops, and unchanged at Rs 31 per kg since February 2019
A fungal disease of sugarcane, historically the most destructive in the Indian cane belt, which rots the stalk from within and cuts both yield and sugar recovery
Sugar carried over at the end of a season after production, consumption, diversion and exports - the buffer that determines whether the next season opens tight or comfortable