India sugar prices face volatility amid production and supply shifts

India's sugar market has experienced significant volatility due to shifting production levels and supply dynamics. Between July 20 and August 20, 2026, retail sugar prices rose 15.6%, increasing from Rs 48.18 per kg to Rs 55.70 per kg. This surge was attributed to lower-than-expected domestic production, festive demand, weather-related crop damage, and tightening global supplies.

However, more recent market data from late August indicates a downward correction. Domestic sugar prices saw declines of approximately ₹50–200 per quintal across key markets, particularly in Maharashtra, as buyers remained cautious despite previous price gains.

India remains the world’s second-largest sugarcane producer, with production reaching 500 million tonnes in 2025-26. The government has set the Fair and Remunerative Price (FRP) for sugarcane at Rs 365 per quintal for the 2026-27 season. Additionally, the diversion of sugar to the ethanol programme has been used as a mechanism to manage surplus production and support mill finances.