Sugar prices in India expected to fall as 3.5 lakh tonnes of refined supply enters market

Domestic sugar supply in India is set to increase significantly, which is expected to ease market volatility and lead to a reduction in retail prices. According to industry reports, between 300,000 and 350,000 tonnes of refined sugar, initially earmarked for export, will now be redirected to the domestic market following a recent government policy shift. This move is designed to curb the price hikes seen in recent weeks.

In addition to releasing existing stocks, the government has authorized the duty-free import of 1 million tonnes of raw sugar. This strategic decision aims to bolster supply levels ahead of the upcoming festive season, a period when demand for sugar typically peaks. Officials suggest that this influx of supply will effectively neutralize concerns regarding shortages.

The impact of these government measures is already evident in the wholesale market. Industry sources indicate that ex-mill sugar prices have declined by approximately 20% over the last 10 days. For instance, in Kolhapur, prices fell to 48 rupees per kilogram, while mills in Uttar Pradesh have seen prices stabilize around 53 rupees per kilogram. These levels represent a significant cooldown from the recent speculative peak of 58–60 rupees per kilogram.

Deepak Ballani, Director General of the Indian Sugar Mills Association (ISMA), noted that the government's intervention is working. He emphasized that the country has adequate sugar availability and that the drop in ex-mill rates is expected to reflect in retail markets shortly. On Wednesday, the average retail price of sugar still hovered around 65 rupees per kilogram, but industry stakeholders expect this to adjust downward soon.

Official assessments suggest that the recent price spikes were largely driven by market speculation and hoarding rather than actual physical shortages. With the release of domestic refinery stocks and the planned arrival of duty-free raw sugar imports, authorities remain confident that the supply situation will remain comfortable, ensuring that consumers can purchase sugar at reasonable rates during the upcoming celebrations.