The Ministry of Agriculture and Farmers Welfare has released a detailed background note on India’s sugar industry, addressing recent price increases and the sector’s broader role in the economy. The note clarifies that while sugar prices have risen sharply in recent weeks, this reflects temporary supply and demand factors rather than a structural crisis. The sector supports nearly 5 crore farmers and around 5 lakh factory workers across the country.
Key Facts About India’s Sugar Sector
India is the world’s second-largest sugarcane producer. Sugarcane production reached 500 million tonnes in 2025-26, marking 43.5 percent growth over the past decade from 348.44 million tonnes in 2015-16. The area under cultivation expanded from 49.27 lakh hectares to 58.87 lakh hectares during the same period. Uttar Pradesh and Maharashtra are the top producing states.
The Fair and Remunerative Price of sugarcane for the 2026-27 season has been fixed at ₹365 per quintal, up from ₹230 per quintal in 2016-17. As of August 20, 2026, 97 percent of sugarcane dues for the 2025-26 season have been paid to farmers.
Sugar exports have increased dramatically from 0.47 lakh MT in 2016-17 to 8 lakh MT in 2025-26, with major shipments going to Sri Lanka, West Asia, and East Africa.
Current production is estimated at 306 lakh MT for the season, lower than the initial estimate of 343 lakh MT, due to crop diseases and excess rainfall. However, adequate stocks exist to meet domestic demand until the new crushing season begins in October.
Recent government measures to control prices include imposing a 400-tonne stock limit on dealers from August 1 to November 30, 2026, restricting bulk consumers to 15 days of sugar stock from September 1, conducting official verification of mill stocks, and permitting duty-free import of 10 lakh MT of raw sugar.
What This Means for You
If you buy sugar, know that the recent price jump from ₹48.18 per kg on July 20 to ₹55.70 per kg on August 20 reflects short-term factors like lower production and festive season demand, not a lasting crisis. Government action on hoarding and imports aims to stabilise prices as the new crushing season approaches. The broader trend shows retail sugar prices have risen only about 3 percent annually over the past two years, suggesting this spike may be temporary.