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Informist, Monday, Aug. 24, 2026

 

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--ISMA official: No sugar shortage, stock position comfortable
--ISMA official: Recent price rally not supported by fundamentals 
--ISMA official: Expect sugar prices to soften in coming days 
--ISMA official: Fresh domestic supply is durable solution to boost stocks 
--ISMA official: Will advance crushing ops to boost supply 
--ISMA official: Special sugar season underway in some southern states
--ISMA: See 1 mln tn sugar output in October on early crush ops 
--ISMA: Sugar price rise unjustified; only limited buys seen at higher levels 
--ISMA: See 3.5 mln tn sugar closing stock as of Sept end

 

NEW DELHI – Sugar prices are expected to soften from their record highs in the coming days as the recent rally was mainly driven by sentiment than by actual shortages, the Indian Sugar & Bio-Energy Manufacturers Association said Monday. The government's permission to import sugar at nil duty has removed the speculative premium built into sugar rates, the industry association said. In addition, mills are expected to advance their crushing operations to mid-October to ensure supplies at affordable rates to meet the demand for the Diwali festival in November, it added.

 

"We are not managing a deficit, we are managing sentiments through measures that are precautionary rather than corrective. Summarising, let me bring this together, India's sugar balance is fundamentally comfortable," ISMA President Niraj Shirgaokar said, adding that prices surged mainly due to increased "speculative behaviours" in the market. 

 

Bulk buyers, who normally procure "just in time", have been stocking up on sugar for months in advance. "That behaviour has pulled sugar out of circulation, and it stays in the godowns, creating an artificial tightness which has nothing to do with actual availability," Shirgaokar said at an ISMA press conference here.

 

Through duty-free raw sugar imports, ISMA said the government aims to stabilise market sentiment and not overcome any sugar deficit. "Making it duty-free ensures it functions as genuinely competitive supply (option) with a limited window," Shirgaokar said. This will roughly provide 25-29?ditional supply to a "projected growing stock cushion" and help remove the "speculative-risk premium" that was built into prices. 

 

Thursday, the government permitted 1 million tonnes of raw or unrefined sugar to be shipped into the country at nil duty until the end of October. Previously, India had allowed duty-free sugar imports about a decade ago. "India faced a similar situation in 2016-17 when consecutive drops pulled production down to around 203 lakh tonnes against a demand of 245-250 lakh tonnes, prompting a 5 lakh tonne import quota," Shirgaokar said.

 

To ensure sugar prices remain in check throughout the festival season, the government has imposed stockholding limits on traders and an inventory-carrying limit for bulk consumers. "The logic is simple: a rolling 15-day cycle forces just-in-time procurement, prevents buyers from sitting on large reserves, and pushes concentrated inventory back into the retail pipeline," Shirgaokar said. 

 

However, the most durable fix beyond near-term measures is fresh domestic supply. "ISMA and National Federation (of Cooperative Sugar Factories) are working to advance the start of the 2026-27 crushing season by 10-15 days," Shirgaokar said. The early crushing operations should increase October sugar production to around 1 million tonnes, compared to the normal 400,000 tonnes. This will "inject" fresh supplies precisely when festive demand peaks ahead of Diwali in November. 

 

Sugar prices have been rallying since July amid speculations over sugar stocks and panic buying ahead of festival demand. Deficient rainfall and forecasts of El Nino strengthening in August and September also added a weather premium to prices. Ex-mill prices have risen to INR 6,000-6,400 per 100 kg from INR 4,600-4,800 in July. ISMA said this price rise is "unjustifiable" and that prices have increased because mills and traders are quoting higher rates, but limited sales are executed at these levels.

 

Asked why sugar prices continue to surge despite several interventions by the government, ISMA officials said the market may have factored in these measures with a delay. "The market may have felt these government measures with a time lag... they have finally understood that the government is not fooling around," ISMA Vice-President Madhav B. Shriram said.

 

On the sugar balance sheet, ISMA said net production in the sugar season 2025-26 (Oct-Sept) is estimated at 27.9 million tonnes and some 3 million tonnes were diverted for ethanol production. The current season opened with carryover stocks of around 5 million tonnes and the closing stock is estimated at 3.5 million tonnes. India consumes around 28 million-29 million tonnes of sugar annually.

 

The association said ethanol production from sugarcane-based feedstock or sugar exports had not caused prices to surge to record highs. India had permitted the export of 2 million tonnes of sugar in the current season but banned exports in May amid worries of lower-than-expected production. ISMA officials said India only shipped out some 800,000 tonnes of sugar this year.  End

 

Reported by Afra Abubacker

Edited by Rajeev Pai

 

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