Sugar Prices Surge Over 40% in Two Months, Touch Record Highs; Sugar Stocks Rally Up to 12%

New Delhi: Sugar prices in India have surged by more than 40% over the past two months, reaching record levels in several parts of the country. The sharp rise has raised concerns among consumers and the government, while simultaneously providing a major boost to sugar mill companies in the stock market.

India is one of the world’s largest consumers of sugar. Amid the sharp increase in domestic prices, the Central Government has allowed the duty-free import of around 1 million metric tonnes of raw sugar for the first time in nearly a decade. The move is aimed at increasing domestic availability and controlling rising prices.

Sugar Prices Cross ₹65 Per Kg in Several States

According to media reports, sugar prices have increased by nearly 50% in some states. Retail prices have crossed ₹65 per kilogram in at least eight states, including Uttarakhand, Punjab, Madhya Pradesh and Odisha.

Odisha recorded the highest price on August 23, with sugar selling at around ₹67.40 per kg. A week earlier, the price was ₹55 per kg, while a month ago it stood at ₹50.78 per kg. On August 23, 2025, sugar was priced at just ₹46.89 per kg in the state.

The figures highlight the sharp year-on-year increase in sugar prices.

Sugar Stocks Rally Up to 12%

The sharp rise in sugar prices was also reflected in the stock market. During Monday’s intraday trading session, shares of several sugar companies surged by up to 12%, driven by expectations of an improved outlook for the sugar sector.

Shares of Bajaj Hindusthan Sugar, Avadh Sugar & Energy, Dalmia Bharat Sugar & Industries, Dhampur Sugar Mills, Dwarikesh Sugar Industries, Magadh Sugar & Energy, Mawana Sugars, Ponni Sugars (Erode), Ugar Sugar Works and Uttam Sugar Mills touched their respective 52-week highs during the session.

₹50 Per Kg Price Could Improve Mills’ Financial Health

A senior industry official said that a sugar price of around ₹50 per kg at the mill level would be considered positive for the industry.

According to industry estimates, the production cost of sugar is expected to remain around ₹42-43 per kg. Over the past few years, sugar mills have often been forced to sell sugar below production costs, putting significant pressure on their financial health.

Industry representatives believe that if ex-mill sugar prices remain around ₹50 per kg for a sustained period, it could significantly improve the financial position of sugar mills.

Opposition Questions Duty-Free Sugar Imports

The government’s decision to allow duty-free sugar imports has also triggered a political controversy. Major opposition parties, including the Congress and Samajwadi Party, have openly criticised the decision to permit sugar imports after such a long gap.

The issue has become particularly sensitive as Uttar Pradesh heads towards its Assembly elections. Analysts believe the government may have limited room to further increase imports or reduce the diversion of sugar towards ethanol production if it wants to bring retail sugar prices down.

Government Faces a Difficult Balancing Act

The government now faces a delicate challenge. Increasing sugar imports could help improve domestic availability and bring prices down, but it could also put pressure on sugar mills that are finally benefiting from higher prices.

Similarly, reducing the diversion of sugar for ethanol production could increase the quantity of sugar available for domestic consumption, but it may affect the government’s ethanol-blending policy and the earnings of sugar mills.

For consumers, the immediate concern remains the sharp increase in retail prices. For sugar mills, however, higher prices could provide much-needed financial relief.

The coming weeks will therefore be crucial, as the government attempts to balance consumer interests, sugar mill finances, ethanol production and the broader political implications of rising sugar prices.