A not-so-sweet surprise: How India went from a year of possible sugar glut to shortage & high prices ahead of festivals | Hindustan Times - Hindustan Times

**India’s Sugar Market Shifts From Glut to Shortage as Festive Season Nears**

After a year in which analysts warned of a possible sugar glut, the Indian market has suddenly tilted toward scarcity, pushing retail prices to unprecedented levels ahead of the country’s major festivals. Earlier in 2024, abundant monsoon‑driven cane output and robust production forecasts had kept expectations of oversupply alive, prompting the Ministry of Food Processing Industries to signal that the duty‑free import quota could remain largely unutilised. However, a confluence of tighter domestic stocks, aggressive speculative buying and concerns over hoarding have upended that outlook.

In response, the Food Secretary announced that ex‑mill prices have fallen 18 % to ₹55 per kilogram, a move designed to encourage importers to tap the duty‑free quota. The government now expects Indian sugar mills and refiners to import roughly half of the allotted quota, a stark reversal of the earlier “no‑need‑to‑import” stance. The Indian Sugar Mills Association (ISMA) has attributed the “unnatural” price surge to extensive stocking by traders and speculative activity, noting that retail prices have breached the ₹65 per kilogram mark for the first time this season. Simultaneously, authorities have tightened surveillance on hoarding, imposing stricter checks at ports and mandating transparent reporting of inventory levels.

The sudden price spike threatens to strain household budgets during Diwali, Eid and other celebrations, where sugar consumption typically rises sharply. While the government’s import push and anti‑hoarding measures aim to stabilise the market, analysts caution that price moderation will depend on the pace at which imported sugar reaches the domestic supply chain and whether speculative pressures subside. If imports are efficiently allocated and hoarding curbs remain effective, the market could see a gradual easing of prices by the end of the festive period; otherwise, consumers may continue to face elevated costs.