Sugar prices may fall soon as 3-3.5 lakh tonnes of refined sugar is expected to enter Indian market

Sugar availability in the domestic market could improve soon, with around 3-3.5 lakh tonnes of refined sugar held by Indian refiners expected to enter the market following a recent government decision.

The move could help ease supply concerns and bring down sugar prices, which have risen in recent weeks. The government has also allowed duty-free imports of raw sugar to strengthen supplies ahead of the festive season.

Why sugar prices may fall in India

The government last week allowed duty-free imports of 10 lakh tonnes of raw sugar. It also permitted processors to sell some refined sugar in the domestic market that was originally meant only for export.


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Officials and industry sources said at least 3 lakh tonnes of processed sugar could reach the domestic market quickly. The subsequent import of 10 lakh tonnes of raw sugar is expected to help address any supply concerns.

The additional availability could put further pressure on sugar prices and provide relief to consumers.

Sugar ex-mill prices fall by 20%

The government’s measures appear to have already affected wholesale sugar prices.

The ex-mill price of sugar has fallen by around 20% over the past 10 days, according to industry sources and officials.

In Kolhapur, the ex-mill price fell to Rs 48 per kg on Wednesday, while sugar was selling at around Rs 53 per kg at mills in Uttar Pradesh.

An official said the sharp movement in prices showed that speculation and stocking, rather than an actual shortage, were behind the recent price rise.

The official noted that prices had increased from around Rs 48 per kg to Rs 58-60 per kg within a few days, despite there being no shortage of sugar.

Sugar availability remains adequate

The Indian sugar industry has said that supplies are sufficient and expects retail prices to respond to the recent fall in ex-mill rates.

Deepak Ballani, director general of the Indian Sugar Mills Association, said the government's steps to rationalise sugar prices had started showing results.

“Over the last few days, ex-mill sugar prices have declined by nearly 20%, and we expect this reduction to be reflected in retail prices very soon. There is adequate availability of sugar in the country, and consumers will get the commodity at reasonable prices during the forthcoming festive season,” he said.

Sugar retail price stands at Rs 65 per kg

Despite the recent fall in ex-mill prices, consumers are still paying significantly more for sugar.

The average retail price of sugar stood at Rs 65 per kg on Wednesday.

With refined sugar stocks expected to enter the domestic market soon and 10 lakh tonnes of raw sugar allowed for duty-free import, officials and industry representatives expect supplies to remain comfortable.

The increased availability could help cool sugar prices further and reduce concerns over supplies during the upcoming festive season.


Inputs from TOI