Sugar Ex-Mill Prices Drop to Rs 5,100 per Quintal After Record Highs as Supply Measures Take Effect

India’s sugar prices appear to be cooling after a period of record gains, with ex-mill prices falling sharply from recent highs as government measures to curb hoarding and improve supplies begin to impact the market. Sugar prices at the all-India level had climbed as high as Rs 6,700 per quintal, but had fallen to around Rs 5,100 per quintal by August 27.

According to industry sources, ex-factory sugar prices in Maharashtra and Karnataka dropped to around Rs 5,100 per quintal on Thursday, August 27. In Uttar Pradesh, ex-factory prices were quoted between Rs 5,200 and Rs 5,300 per quintal. Prices could decline further in the coming days as supplies increase and action against hoarding improves market availability, the sources said.

Deepak Ballani, Director General of the Indian Sugar & Bio-energy Manufacturers Association, said sugar prices have corrected by nearly 20% from recent highs as supply-side measures and improved market visibility begin to take effect. The correction is expected to continue as festive buying normalises and fresh sugar becomes available in the coming weeks.

Retail, Wholesale Prices Remain Elevated

Despite the correction in ex-factory prices, sugar prices in the wholesale and retail markets remain significantly higher than a month ago.

According to data from the Department of Consumer Affairs, the average retail price of sugar in India stood at Rs 64.33 per kg on August 27, compared with Rs 65.06 per kg on August 26. A month earlier, the average retail price was Rs 48.92 per kg, indicating an increase of around 32% over the past month.

The average wholesale price of sugar stood at Rs 5,947.22 per quintal on August 27, compared with Rs 4,532.33 per quintal a month earlier. This means wholesale prices remain at around Rs 59-60 per kg, up from approximately Rs 45 per kg a month ago.

Government Steps to Curb Prices

The government has stepped up efforts to contain sugar prices ahead of the festive season. Measures include imposing stock limits, tightening action against hoarding and black marketing, and approving duty-free imports of 10 lakh tonnes of raw sugar.

These interventions are beginning to reflect in ex-factory prices, industry sources said.

Around 350,000 tonnes of sugar held by refiners could soon be supplied to the domestic market after the central government granted the necessary approvals. The additional availability is expected to improve supplies and help moderate prices.

Crackdown on Hoarding Begins to Show Impact

There has been no change in estimates for sugar production during the current 2025-26 crushing season, which is projected at 279 lakh tonnes, with closing stocks of around 35 lakh tonnes expected by September 30.

However, hoarding and speculative activity are also being seen as factors behind the sharp volatility in sugar prices.

According to industry sources, one of the key reasons behind the recent correction is the government's stricter monitoring of stockists and sugar mills. Physical verification of stocks is being carried out, while measures such as stock limits for traders and bulk buyers have also been introduced. Central and state government authorities are taking action against hoarding and black marketing.

Impact of Duty-Free Raw Sugar Imports

The Government’s decision to permit duty-free raw sugar imports provides an additional supply cushion during the festive period. 

The central government has permitted sugar refining units operating under Export Oriented Units (EOUs) to sell imported raw sugar, originally meant for exports, in the domestic market.

According to industry sources, two sugar refineries in Kandla are in a position to refine imported raw sugar and make it available in the domestic market within around 10 days. These refineries are estimated to have between 350,000 and 400,000 tonnes of sugar available.

If other sugar mills also import raw sugar, the cost could work out to around Rs 51-52 per kg at the ex-mill level. As a result, industry sources believe there may be limited scope for a major further decline in current ex-mill prices.

Early Crushing Could Improve Availability

The industry expects more than 35 lakh tonnes of sugar to be available for October. The 2026-27 crushing season could begin around 15 days earlier than usual, with several sugar mills expected to start crushing operations from around October 15.

This could make around 10 lakh tonnes of sugar from the new season available for November, helping meet demand during the festive period and further improving market supplies.

ISMA maintains that domestic sugar availability remains adequate, with fresh supplies expected as special crushing continues and the 2026–27 crushing season is advanced.