Kharge questions Centre as sugar prices surge: Why are stocks at a 9-year low?

New Delhi: Congress president Mallikarjun Kharge has criticised the Centre over rising sugar prices and declining domestic stocks, questioning the government’s handling of supply and its ethanol blending policy ahead of the festive season.

In a post on X, Kharge raised three questions for the Narendra Modi government. He asked why sugar stocks in India, one of the world’s largest sugar producers and exporters, had fallen to their lowest level in nine years, why sugar prices had risen sharply in recent months, and whether the government should review the diversion of sugarcane and grains for ethanol production.

Kharge also questioned the government’s decision to allow the duty-free import of one million tonnes of sugar while domestic supplies remain under pressure.

“First, sugar production declined, then stocks reached their lowest level in nine years, now we're importing sugar from abroad and on the other hand, we're throwing sugarcane into ethanol to blend with petrol,” Kharge said, questioning the Centre’s ‘Atmanirbhar Bharat’ policy.
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Centre rejects ethanol link
 

The Ministry of Consumer Affairs, Food and Public Distribution, however, has rejected the claim that ethanol production is responsible for the recent increase in sugar prices.

According to the ministry, retail sugar prices rose from ₹48.18 per kg on July 20 to ₹55.70 per kg on August 20. It said the increase was due to several factors, including lower-than-expected domestic production, higher demand ahead of festivals, crop damage caused by weather conditions, tighter global supplies and speculation and hoarding.

The ministry said the share of sugar diverted for ethanol production has actually declined, from around 12% in 2022-23 to about 9% in 2025-26. It also noted that nearly three-fourths of India’s ethanol production now comes from grains, particularly maize.

Production falls below estimate

Domestic sugar production for the current season is projected at 306 lakh metric tonnes (LMT), significantly below the initial estimate of 343 LMT.

The ministry attributed the shortfall to crop damage caused by diseases such as Red Rot and Top Borer, along with waterlogging following excess rainfall.

Despite the lower production, the government said sugar stocks are sufficient to meet domestic demand until the new crushing season begins in October.
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Global shortage adds pressure

India’s sugar market is also facing pressure from a wider global supply shortage. The global sugar deficit for 2026-27 is estimated at 33 LMT, with adverse weather conditions affecting production in several regions.

International sugar prices rose from $474 per tonne on June 30 to $552 per tonne on August 20, an increase of more than 16% in less than two months.

To prevent hoarding and artificial shortages in the domestic market, the government has retained a 400-tonne stock limit for dealers until November 30. From September 1, bulk consumers will also face a 15-day limit on sugar stocks.

Central and state government teams are conducting physical stock checks at sugar mills as part of efforts to prevent artificial scarcity.
(With ANI inputs)