Sunil Negi
NEW DELHI | 20 August 2026
The retail price of sugar has surged to Rs 62-65 per kg in many markets across India, marking the highest ever increase in recent years, up nearly Rs 20 per kg compared to last season. Wholesale prices in Kolhapur, a key trading hub, have risen nearly 20% since early August to a record Rs 5,350 per 100 kg, according to traders and government data.
The sharp hike is being attributed to tight supplies after lower sugar production, deficient rainfall in Maharashtra and Karnataka, and diversion of sugarcane for ethanol blending under the government’s 20% blending programme, known as E20.
Under the Ethanol Supply Year 2025-26, the government has pushed ethanol procurement from sugar juice at Rs 65.61 per litre and from B-heavy molasses at Rs 60.73 per litre, making diversion more lucrative for mills than producing sugar.
The price rise comes during peak festival season from Ganesh Chaturthi to Diwali, when demand for sugar, sweets, biscuits, confectionery and bakery items spikes.
Confectioners in Delhi and Mumbai say mithai prices are likely to go up by 15-20%, while biscuit and bakery manufacturers are also reviewing rates. This adds to existing inflationary pressure on daily consumables.
According to shopkeepers, retail inflation is being felt across the basket. Edible oil, pulses, milk, curd, butter, tea, toothpaste and vegetables have seen 8-15% increase in the last three months.
Restaurant food prices have also risen due to higher input costs of sugar, oil and commercial LPG. While headline CPI inflation for July was reported around 4.8%, food inflation remains sticky at over 7%.
To control prices, the Centre has imposed emergency stock limits from August 1 to November 30, 2026. Sugar dealers cannot hold stock for more than 30 days and not more than 4,000 quintals at any location.
The August sales quota for mills has been kept at 2.25 million tonnes, same as last year. Government sources told Reuters that India is now considering limited duty-free sugar imports for the first time in nearly a decade to increase domestic supply during festivals, and may also curb cane diversion for ethanol.
Industry body ISMA has said the minimum selling price of sugar has been fixed at Rs 31 per kg since February 2019 while the cost of production has risen to over Rs 40.24 per kg, and is demanding a hike to Rs 40 per kg.
The government is weighing that demand along with ethanol price revision.
Consumer groups say the surge is breaking the back of middle and lower-middle class families already burdened by high prices of petrol, domestic and commercial gas, cereals, pulses and medicines. With festive season ahead, any further increase in sugar could push up prices of all sugar-dependent products, they warn.
