The bitter sugar squeeze

India is one of the largest consumers of sugar in the world, and people are facing an acute price hike. Prices have jumped by 30% to 40% in just a month, breaching ?65 a kg in many states. It couldn’t have come at a worse time, with a slew of festivals lined up for the com ing months. It is not very often that we see such a crisis in sugar. The last time India faced something similar was nearly a decade ago during a severe drought, when the govern ment allowed the import of raw sugar. Various reasons are being attributed to the current crisis. One is the sharp decline in the production of sugar, from initial estimates of 34.3 million tonnes to 30.6 million tonnes. El Niño too has played its part, with unsea sonal excess rainfall resulting in flooding.

There have also been reports of crop diseases like red rot affecting sugarcane yields.With the global supply chain thrown into chaos, diesel and fertiliser prices have also gone up, driving up input costs for farmers. Fingers are also pointing to policy blunders, like the government allowing the export of nearly 8 lakh tonnes of sugar earlier this year, a move that was withdrawn in May. Besides all this, there have been the usual reports of traders engaging in hoarding and black-marketing. The Centre’s aggressive ethanol-blending programme is also being blamed, with the opposition, led by AAP’s Arvind Kejriwal and Congress’s Jairam Ramesh, saying sugarcane is being diverted, leading to a short fall.

The government has denied this, saying the share of sugar diverted to ethanol has declined from 12% in 2022–23 to 9% in 2025–26, and that nearly three-quarters of the ethanol requirement is being met from grains like maize.To avoid a repeat of a similar crisis in the run-up to festivities, it might be better for the government to deploy technologies like satellite imaging and drones to predict any possible crop shortfall, instead of relying on subjective trade estimates which can be error-prone. This can also help with precise, real-time tracking of crop progress and any possible damage owing to the vagaries of weather. Experts have also suggested that the 100% import tariff on raw and white sugar could be slashed early in the season if a supply deficit is forecast. Imposing stock limits on dealers and bulk consumers will also prevent large players from squeezing the retail market. Only such proactive steps on multiple fronts will help protect the festive season from turning bitter.