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Informist, Thursday, Mar. 19, 2026

 

By Taniva Singha Roy

 

MUMBAI – Despite sales quota for the peak summer month of March being lower, the current downward trend in sugar prices is likely to continue in the near term, market participants said. Limited demand from bulk consumers of sugar, higher freight rates, and reluctance of traders to stock the sweetener near the end of the financial year has contributed to the downward trajectory, they said.

 

So far in March, prices have fallen by INR 60-IN 70 per 100 kg in Uttar Pradesh and by about INR 25 per 100 kg in Maharashtra from the peak of INR 3,925-INR 4,066 per 100 kg in the early days of the month, traders said. Prices across the country are currently at INR 3,805-INR 4,060 per 100 kg, down from INR 3,820-INR 4,065 per 100 kg a month ago.

 

In the first few days of the month, prices had risen by INR 30-INR 40 per 100 kg as the sales quota allocated for March was considered to be lower than required. However, prices could not remain high as mills were unable to offload much of their stock, they said.

 

The government has set the domestic sugar sales quota for March at 2.25 million tonnes, 2.2% lower than 2.30 million tonnes same month last year but unchanged from last month. Traders in the wholesale and resale markets are not eager to buy as they want to liquidate their stocks before the financial year ends, traders said. Traders and mills try to exhaust their stocks before the financial year ends on Mar. 31 to generate cash flow, reduce inventory holding costs, and manage tax liabilities.

 

Demand from bulk consumers like ice-cream and cold-drink makers has been limited even though it is summer as there is a shift in consumer preference to healthier alternatives such as stevia and monk fruit, said Mukesh Kuvadia, secretary of the Bombay Sugar Merchants Association. "Prices are likely to fall by another INR 10-INR 20 per 100 kg this month," he said.

 

Demand for sugar from the hotels, restaurants, and cafes, or the HORECA segment, has also been hit as many eateries have shut down due to shortage of liquefied petroleum gas because of the West Asia war. "Even though the impact was only for a few days, there was less demand for sugar as traders thought eateries could be shut for longer," said Naresh Gupta, a trader from north India.

 

Seemal Sudhir Jain, secretary of the Kolhapur Karad Sangli Sugar Merchant Association, said that even though there is demand, due to higher freight rates, demand from destinations such as Rajasthan is lower. "Due to lower availability of trucks on Holi festival and Gudi Padwa this month, freight charges were INR 30-INR 40 higher per tonne," Jain said.

 

In Maharashtra, prices of the sweetener are likely to stabilise at current levels, Jain said. In Uttar Pradesh, prices are likely to fall by another INR 20-INR 25 per 100 kg, as they have already fallen significantly from the levels in February, Gupta said.

 

EXPORT IMPACT

Availability of sugar in the domestic market has increased as export demand is subdued due to uncompetitive prices and the war in West Asia, market participants said.

 

India's net sugar production in 2025-26 (Oct-Sept) is estimated at 29.3 million tonnes, down from the earlier estimate of 30.95 million tonnes, the Indian Sugar & Bio-Energy Manufacturers Association has said. Some analysts peg the sugar output even lower. G.K. Sood, chairman of MEIR Commodities, said sugar output would be around 28 million tonnes.

 

Domestic consumption during the ongoing season is expected to be around 28.5 million tonnes. "With a halt in sugar exports, the shortfall in availability of the sweetener in case of a lower output can be dealt with," Gupta said.

 

Despite being of lower quality, Indian sugar is overpriced by $37 per tonne than the prices quoted on ICE Futures Europe, Sood said. The benchmark global white sugar contract of 45 ICMUSA colour is traded on the ICE Futures Europe, whereas Indian sugar is mostly of 80 to 150 ICUMSA colour, according to market participants. ICUMSA stands for International Commission for Uniform Methods of Sugar Analysis.

 

The government had earlier allowed export of 1.5 million tonnes of sugar in the season ending September. Subsequently, on Feb. 13, it allowed export of an additional 500,000 tonnes sugar to help manage surplus availability in the country. However, out of the additional quota, mills have applied for only 87,587 tonnes as prices were uncompetitive, and the remaining quantity lapsed.

 

Moreover, following the attack on Iran by the US and Israel, India's exports of sugar, along with those of several other commodities, to West Asia have fallen. Exports of sugar to Afghanistan and certain West Asian nations averaged 60,000–70,000 tonnes a month, and shipments were projected to reach nearly 500,000 tonnes by September, which is 20% of the total export quota. However, the ongoing war has hit shipments, Sood said. This sugar is now available in the domestic market, which will dampen prices further.  End

 

Edited by Ashish Shirke

 

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