Every year from August to November, India welcomes important festivals such as Ganesh Day, Decade Day and Lamplighter Day, and consumption of sweets, desserts and other foodstuffs usually increases significantly. But this year, before the festive peak season has arrived, sugar prices have already begun to rise. The India Express reported on 23 that “sugar has already become ‘bitter’ first.”
According to data from the Ministry of Consumer Affairs of India, as of July 21, the retail price of Indian sugar, an indispensable ingredient in candy and chocolate, had risen to 65 rupees per kilogram (100 Indian rupees = about 7.0 yuan). On July 21, this price was only 45 rupees per kilogram, rising 20 rupees in just one month.
Behind the rise in sugar prices is a decline in domestic production. The latest estimate by the Indian government is that India‘s sugar production in the 2025/2026 pumping season will be about 30.6 million tonnes, about 11% lower than the previous initial estimate of 34.3 million tonnes.
The India Express analyzed that excessive rainfall in Maharashtra, Karnataka and Gujarat from September to October last year affected sugarcane growth. Field water accumulation coupled with insufficient sunlight deprived the sugarcane of sufficient air and light, which in turn affected sugar accumulation in the stalks, ultimately leading to a drop in single yield and impacting sugar production and stocks this year.
This change has already been reflected in market prices. Data from India‘s National Commodities and Derivatives Exchange showed that on August 19th, the price of raw sugar in India‘s main markets rose to 5,530 rupees per 100 kilograms, a record high in 16 years.
Faced with the double pressure of approaching holiday peak consumption season and domestic production below expectations, the Indian government has recently taken consecutive measures to increase market supply. On August 20, the Indian government announced that it would allow duty-free imports of up to 1 million tonnes of raw sugar, effective until October 31.
According to Bloomberg, India usually levies tariffs of about 100% on imported sugar. This is the first time in nearly a decade that India has adopted such a large-scale duty-free import measure. This tariff removal will help import sugar enter the domestic market faster. At the same time, to prevent companies from hoarding, the government has also strengthened inventory restrictions.
The Indian Times and other media reports that the government hopes to release more sugar to the market through means such as increasing imports and limiting inventories to avoid supply shortages during the holiday season.
However, the Indian government‘s price stabilization initiative unexpectedly brought new upward momentum to the international sugar market. According to Reuters, London and New York‘s sugar futures prices rose by about 4% after India announced its duty-free import of 1 million tonnes of raw sugar. India had not imported sugar on such a large scale for nearly a decade, and now re-entering international market procurement means that the global sugar market will face new increases in demand, which further exacerbates market concerns about supply tightening.
Bloomberg analyzed that weather conditions in the world’s major sugar-producing regions could further push up sugar prices. The El Niño is currently threatening crops in Asia, and Brazil, the world’s largest sugar exporter, has been hit by unusually heavy rains, disrupting sugar cane pressing operations.
Analysts believe that if India‘s demand for imports continues to increase, while global supply continues to tighten, international sugar prices may face further pressure to rise.