New Delhi: India is mulling on introducing duty-free importation of sugar to help ease record high sugar price in the local market. The decision follows a surge in the prices of sugar, which is expected to more closely watch on inflation and the cost of food products for the consumers.
The government and industry sources indicate that in one of the important sugar trading cities of India, wholesale prices of sugar have risen by almost 20% since August 1. Notwithstanding the availability of sufficient sugar stocks in the country, the prices have reached an all-time high of about ₹5,350 per 100 kg.
The market is under discussion and several measures are being taken in order to stabilize the market. They include permitting importing of sugar by sugar mills with limited amount subject to zero import duty, reducing the stock holding limit of sugar traders with large trading volume and changing monthly sales quota of the sugar mills. If sugar prices keep going up, sugar mills may import up to one million metric tons of sugar in October, reports say.
The price hikes are primarily attributed to the high demand for the upcoming festive seasons such as Ganesh Chaturthi, Dussehra, and Diwali which are been celebrated in the country. During these months, there is generally a higher demand for sweets and other sugar-related products, which can further strain supplies.
The government is also in the process of looking back at the ethanol made from sugarcane. So much sugar has been used in ethanol production in the past few years in India’s clean fuel initiative. Officials say that a cut in sugarcane supply to ethanol may help bring sugar supply and help keep sugar prices in check in the domestic market.
If approved, the imports would be India’s first sugar imports in almost 10 years. Earlier the country became one of the world’s largest exporters of sugar but now, the country has been completely closed to sugar exports till September 2026 to ensure proper supply to domestic market.
However, the final outcome is likely to be made in the next few weeks, as authorities are closely monitoring the prices and stocks. The government’s main objective is to guarantee fare sugar stocks and to not further aggravate prices during the peak festival season.
