Sugar Prices Expected to Ease Within a Week as ISMA Dismisses Shortage Concerns
The Indian Sugar & Bio-Energy Manufacturers Association (ISMA) said on Monday that retail sugar prices are likely to start declining within the next seven days, as speculative and panic buying that drove a sharp rally over the past few weeks begins to ease. Addressing a press conference in New Delhi, ISMA officials asserted that the country has no sugar shortage and that the recent price rise was driven by market sentiment rather than any physical supply crunch.
ISMA Director General Deepak Ballani told ANI that ex-mill prices have already started to fall, and the effect should soon be visible at the retail level. “This price rise in the last 20 days is because of the speculative buying, the panic buying; there are absolutely no problems of the physical sugar availability in the country,” he said, adding that the perception of tightness that fueled the buying was “unfounded.”
ISMA President Niraj Shirgaokar echoed that view, saying that “India does not have a sugar shortage” and that production and stock positions remain “fundamentally comfortable.” The association projects a closing stock of roughly 35 lakh tonnes at the end of September, which Shirgaokar described as a healthy buffer against normal domestic demand.
Price Rise and Government Response
Retail sugar prices have climbed sharply over the past month. According to government data cited by the Free Press Journal, the average all-India retail price stood at Rs 63.05 per kg on Monday, about 29% higher than Rs 48.73 a month earlier. The Economic Times reported that prices rose from Rs 48.18 per kg on July 20 to Rs 63.12 per kg by August 23. In Maharashtra, ex-mill prices have been volatile as well, moving from Rs 38-39 per kg in October last year to Rs 56 per kg on August 24, after touching Rs 62 on August 21, according to The Hindu. An industry source told The Hindu that ex-mill prices are likely to hover between Rs 50 and Rs 60 until November-December.
The government has responded with a series of measures, most notably permitting duty-free imports of 1 million tonnes (10 lakh tonnes) of raw sugar — the first such move in nearly a decade, as noted by The Tribune. Stockholding limits have also been tightened: dealers are now capped at 400 tonnes (ISMA has asked for a reduction to 200 tonnes), bulk consumers are limited to 15 days of consumption from September 1, and a 7-day timeline has been set for lifting purchased stock from mills. The government has also allowed sugar refineries that imported sugar under advance licence to sell some stock in the domestic market.
ISMA officials welcomed these steps, calling them a “comprehensive package” that would strengthen market confidence and discourage speculative holding. The Hindu reported that imported sugar from Brazil is expected to land in Indian ports by mid-October.
Ethanol Not the Cause, Says ISMA
ISMA has repeatedly rejected the notion that the ethanol blending programme is behind the price rise. Director General Deepak Ballani said ethanol is not responsible for the current price movement, a point echoed by other officials. Sugar-based ethanol accounted for only about 25% of ethanol supply in 2025-26, down from over 80% in 2021-22, with grain-based ethanol now supplying the majority. The association argued that the diversion of sugar to ethanol is too small to create a shortage.
Production and Demand Outlook
ISMA estimates net sugar production for the 2025-26 marketing year at around 279 lakh tonnes, against domestic consumption of 280-285 lakh tonnes, with opening stocks of 50 lakh tonnes. The projected closing stock of 35 lakh tonnes is considered sufficient for the transition into the next season. Mills are expected to begin operations around October 15, with October production estimated at 10-12 lakh tonnes against demand of 24-25 lakh tonnes. Special crushing is already underway in Tamil Nadu and Karnataka, and ISMA, along with the National Federation of Cooperative Sugar Factories, is working to advance the start of the 2026-27 crushing season by 10-15 days.
Speculation and Bulk Buying Blamed
ISMA officials attributed the price spike primarily to speculative behaviour by traders and bulk buyers, who stocked supplies well in advance, creating an artificial shortage. “Bulk buyers have started stocking sugar, taking supplies out of regular circulation,” President Shirgaokar said, as reported by India Today. ISMA Vice President Madhav B. Shriram added that mills and warehouses have adequate stocks and that the shortage being projected “does not match ground reality.” Weather-related factors, including red rot disease in Uttar Pradesh and higher crushing in Maharashtra, also contributed to the market sentiment, as did firm international prices.
Concerns Over Volatility Remain
Despite the reassuring statements, some caution persists. The Hindu noted that while prices are cooling, volatility remains a concern, with ex-mill prices expected to stay in a range of Rs 50-60 per kg for the next few months. The Economic Times also pointed out that domestic sugar stocks are estimated below the government's normative buffer of 6 million tonnes, though ISMA maintains that the current stock level is sufficient.
As the festive season approaches, ISMA expects prices to stabilise further as fresh supplies enter the market and government measures take full effect. For now, consumers may see some relief within the week, as the industry body has promised.