New Delhi

Thegovernment on Friday rejected claims that diversion of sugar for ethanol production was driving a sharp rise in the price of the sweetener and instead blamed the industry for jacking up prices despite the country having sufficient stock to meet domestic demand.

The Centre said it has asked States to take action against hoarding and black marketing of the sweetener and also start preparing for early start of the crushing season by mills, by around October 15. It is also considering reducing the stock that dealers can currently hold.

Briefing the media on sugar availability and prices, Food Secretary Sanjeev Chopra said the government has taken precautionary measures by allowing imports of 10 lakh tonnes of sugar by October 31 and imposing stock-holding limits on dealers as well as bulk consumers such as soft-drink and ice-cream makers.

He asserted that there are ample sugar stocks in the country despite a fall in production to 306 lakh tonnes for the 2025-26 marketing year (October-September), down from earlier estimates of 343 lakh tonnes. Annual domestic sugar demand is around 280-285 lakh tonnes.

The production has been affected by Red Rot and Top Borer disease in sugarcane, as well as waterlogging caused by excess rainfall, Chopra said.

Following the government's recent measures, the secretary said retail prices are expected to fall in the coming days. The all-India average retail price has shot up to Rs 56 per kg from Rs 48 per kg on July 20.

Chopra pointed out that ex-mill sugar prices have shot up to Rs 62 per kg from Rs 47-48 per kg in just about 7-10 days, and said this kind of hike is completely unjustified. On Friday, the secretary called representatives of the industry bodies ISMA and the National Federation of Cooperative Sugar Factories (NFSCF) and told them that this sudden, sharp hike in ex-mill prices is "not acceptable". "It is incorrect to attribute the recent increase in sugar prices to diversion of sugar for ethanol production," Chopra said, adding that the diversification has improved the financial health of the sugar sector and also helped in timely payment to farmers. He said only 28 lakh tonnes of sugar have been diverted in the current 2025-26 marketing season. Only one-fourth of ethanol is now made from sugar and the rest from grains, mainly maize. "There has been this sharp increase in the prices of sugar in the recent past, and they have gone up from Rs 48 just about 15 days back to a level of Rs 56 now. It is important to clarify that this is not based on any fundamentals," Chopra said.