Sugar Prices Ease 18% Following Government Intervention and Anti-Hoarding Measures
NEW DELHI – After surging to a record-breaking peak of Rs 67 per kilogram last week, domestic sugar prices have begun to retreat, offering a much-needed reprieve to consumers. Ex-mill rates, which had soared due to market volatility, have now dropped by approximately 18%, stabilizing at Rs 55 per kg.
The cooling trend comes on the heels of decisive intervention by the Indian government. Food Secretary Sanjeev Chopra confirmed that the recent price spike was not driven by a genuine supply shortage, but rather by mills artificially inflating rates.
“Ex-mill prices of sugar, which were jacked up by mills, have started cooling down. They have declined to Rs 55 per kg and will further drop in the coming days,” Chopra stated. He emphasized that India maintains sufficient stockpiles to meet the nation’s annual domestic demand of approximately 280–285 lakh tonnes, despite projections of a lower production output of 306 lakh tonnes for the 2025-26 marketing year.
Government Crackdown on Market Manipulation
To stabilize the market, the Centre implemented a multi-pronged strategy last week. This included authorizing the import of 1 million tonnes of raw sugar to bolster domestic availability. Furthermore, the government imposed strict stock limits on bulk consumers and directed state authorities to deploy “flying squads” to conduct aggressive inspections, effectively curbing hoarding and speculative trading.
Prakash Naiknavare, Managing Director of the National Federation of Cooperative Sugar Factories (NFCSF), corroborated the decline, noting that ex-mill prices have dipped to Rs 55 per kg or lower across the country. “The Centre’s action has been instrumental in stopping the unchecked rise in prices,” he said, suggesting that further corrections at the mill level are likely in the near term.
The Lag Between Mill and Retail Markets
While the drop at the mill level is significant, the benefits have yet to fully permeate the wholesale and retail sectors. Industry experts highlight that there is typically a price hierarchy in the sugar market: a Rs 2–3 per kg difference between ex-mill and wholesale prices, and a further gap of Rs 7–8 per kg between wholesale and retail shelves.
According to the latest data from the Ministry of Consumer Affairs, as of August 24, the national average wholesale price stood at Rs 58.29 per kg, while retail prices hovered around Rs 63.05 per kg. Market analysts expect that as the reduction in ex-mill rates filters through the supply chain, consumers will see a more pronounced decrease in retail prices in the coming weeks.
As the government maintains its oversight on supply chains, stakeholders remain optimistic that the sugar prices will continue to stabilize, ensuring affordability for households and bulk consumers alike.
