The government on Friday said the recent surge in sugar prices cannot be attributed to the diversion of sugar for ethanol , pointing instead to lower-than-expected domestic production, higher festive-season demand, and weather-related crop damage.
Government blames fall in domestic production
The price surge has prompted the government to step up measures to curb hoarding and allow sugar imports for the first time in nearly a decade to augment domestic availability ahead of the festive season. Nearly three-fourths of ethanol produced in India now comes from grains, particularly maize, the government stated. Average retail sugar prices rose from ₹ 48.18 per kg on July 20 to ₹ 58.20 per kg on August 21, according to data from the consumer affairs ministry’s price portal. The share of sugar diverted for ethanol has declined from around 12% of production in 2022-23 to about 9% in 2025-26 as output dropped, according to an official release. Earlier reporting noted: According to the government, the share of sugar diverted for ethanol production fell from around 12% in 2022-23 to around 9% in 2025-26.
Earlier reporting noted: “It is incorrect to attribute the recent increase in sugar prices to diversion of sugar for ethanol production,” the Ministry of Consumer Affairs, Food & Public Distribution said in a statement. It also said nearly three-fourths of the ethanol produced in the country now comes from grains, particularly maize. Earlier reporting noted: Centre says rise in sugar prices cannot be attributed to ethanol The government on Friday rejected claims that ethanol production was driving the recent surge in sugar prices.
