India's sugar industry body shares a positive price outlook

The Indian Sugar & Bio-Energy Manufacturers Association (ISMA) has shared an optimistic outlook regarding the domestic market, anticipating that retail sugar prices will soften in the coming days. According to the industry body, the recent surge in sugar prices was driven primarily by speculative hoarding and concerns over weather-related production challenges rather than fundamental supply issues. ISMA President Niraj Shirgaokar stated that sugar mills have not been responsible for creating artificial scarcity or inflating ex-mill prices.

Data from the association indicates that prices have already begun to stabilize following the government's decision to permit the duty-free import of 1 million tonnes of raw sugar. This policy shift is intended to address tightening domestic supplies, which currently stand at an estimated 3.5 to 3.9 million tonnes—well below the government's mandated normative buffer level of 6 million tonnes.

ISMA analysts highlighted that speculative pressures are intensified by bulk buyers, who typically begin accumulating stocks one to two months before the festive season. This activity contributed to a sharp rise in retail prices, which climbed from ₹48.18 per kg on July 20 to ₹63.12 per kg by August 23. Despite this volatility, the association maintains that the country's current stock position is comfortable and there is no actual shortage of the commodity.

As the industry prepares for the new crushing season, which is expected to commence around October 15, producers aim to output 10-12 million tonnes of sugar in October against an estimated demand of 24-25 million tonnes. To further curb speculative activity ahead of the festive rush, the government has tightened stockholding limits for bulk consumers, restricting them to 15 days of inventory starting September 1.

The situation has also drawn political scrutiny. Congress President Mallikarjun Kharge raised concerns over sugar stocks falling to a nine-year low, questioning the government's decision to halt exports and pivot to duty-free imports. Despite these criticisms, the government continues to defend its interventionist approach as a necessary measure to ensure market stability and prevent further price escalation amid a challenging production environment.