Resale Sugar Prices Drop in Maharashtra and Karnataka Following Government Move to Allow Duty-Free Raw Sugar Imports

Resale sugar prices in key producing states of Karnataka and Maharashtra dropped by ₹400 to ₹500 a quintal on Friday. The decline followed the central government's decision to permit the duty-free import of 1 million tonnes of raw sugar under a tariff rate quota (TRQ) regime to curb soaring prices and food inflation.

According to industry sources, the drop in resale prices was driven by a lack of demand amid concerns over heavy resale pressure from upcoming raw sugar imports. Traders, who had previously purchased sugar from factories through tenders at ₹5,500 to ₹5,800 per quintal but had not yet lifted it, began offloading stocks below Thursday's market price to realize quick profits under tighter government price controls and regulatory restrictions.

Despite the downward pressure on resale rates, retail prices rose to a new high of ₹58.15 per kg on Friday, up from ₹55.70 previously. Industry sources noted that the drop in wholesale resale prices is expected to reflect at the retail level soon. State government and food department officials have stepped up enforcement, intercepting vehicles for checks, sealing an unregistered warehouse in Karnataka, and enforcing stock-holding limits. Under the new notification, bulk buyers using over 10 tonnes of sugar a month are restricted from holding more than 15 days of stock until November 30.

Global sugar markets also reacted to India's import policy. October raw sugar futures dipped to 17.35 cents a pound after briefly surging to 18.26 cents following the announcement, while cash raw sugar was quoted at 17.5 cents. In London, white sugar slipped to $548 a tonne from a high of $558 on Thursday.

Trade sources indicate that nearly 4 lakh tonnes of raw sugar could arrive in India within 45 days, with 3 lakh tonnes already in transit. The Directorate-General of Foreign Trade has specified that preference will be given to importers who bring in consignments by October 15, and license holders must produce 1 tonne of white sugar for every 1.05 tonnes of raw sugar imported.

Additionally, the Ministry of Food has instructed all mills to submit transaction details for sugar sold on August 17, 18, and 19 to monitor buyer volumes and trace market activity. The government stated that lower-than-estimated production for the 2026–27 season—projected at around 306 lakh tonnes compared to an initial estimate of 343 lakh tonnes due to crop diseases like Red Rot and Top Borer, alongside excess rainfall—contributed to the recent price surge. However, authorities maintained that adequate domestic stocks remain available to meet demand until the crushing season begins in October.

The government also clarified that ethanol diversion has not driven up sugar prices, noting that the share of sugar diverted for ethanol has declined from 12 percent in 2022–23 to 9 percent in 2025–26, with three-fourths of domestic ethanol now produced from grains such as maize.

"The recent intervention by the government through duty-free raw sugar imports highlights how regulatory policy directly influences wholesale commodity markets and trader behavior. While resale prices have dipped due to increased monitoring and expected supply inflows, the reality of rising retail prices shows the complexity of managing domestic food inflation against agricultural supply deficits. For businesses operating in the agricultural and supply chain sectors, navigating these sudden policy shifts requires agile inventory management and strict compliance with evolving stock-holding norms." — Dr. Shishir Gupta, Founder & CEO, StartupLanes