Sugar Market Softens Following Government Measures

01-Sep-2026 11:02 AM

New Delhi. Thanks to various precautionary measures taken by the Union Ministry of Food, the runaway surge in sugar prices has been halted; furthermore, ex-factory rates, wholesale market prices, and retail prices have begun to decline. This will bring relief to consumers during the festive season.

However, the government remains concerned because the drop in retail sugar prices has been minimal compared to the decline in ex-factory and wholesale rates. The government has already permitted the duty-free import of 10 lakh tonnes of raw sugar and has now started issuing fortnightly domestic sales quotas to help monitor the sales activities of mills, traders, and stockists.

In reality, the sugar purchased by retailers at higher prices earlier has now become a burden; they are unable to lower retail prices until this old stock is exhausted. While new stock is available at lower rates, it can only be sold after some time.

Ex-factory sugar prices have fallen sharply—by about 25 percent from their peak—yet this impact is not significantly reflected at the retail level. The Ministry of Food has released a 'free sale' quota of 13 lakh tonnes for the period of September 1–15, a figure that appears somewhat high. Industry analysts believe this is a critical juncture for the sugar market, requiring a very cautious approach.

A stock of approximately 3 lakh tonnes, originally intended for export, has now been diverted for sale in the domestic market. This will significantly boost sugar supplies and could exert downward pressure on prices. Reducing retail sugar prices remains a challenge for the government.