Retail Sugar Prices Remain High Across India Despite Wholesale Dips

Retail sugar prices across various regions in India are continuing to trade well above ₹60 a kg, despite a drop of over 20 per cent and 10 per cent in mill-level and wholesale prices respectively since August 21.

Data from the Department of Consumer Affairs’ Price Monitoring Division indicates that retail prices have reached as high as ₹77 a kg, while minimum rates hover around ₹42. However, the majority of retail transactions are taking place at ₹65 a kg. Alongside sugar, jaggery (gur) prices have also risen to ₹90-100 a kg, up from ₹70 in July.

Wholesale sugar prices saw a decrease of ₹50-200, with rates ranging from ₹5,300 a quintal in Mumbai to ₹6,000 in Chennai. Mills open rates in tender ranged from ₹4,400 to ₹4,900 a quintal for S-30 grade sugar and ₹4,600 to ₹5,000 a quintal for other grades.

EID Parry whole-time director and CEO Muthiah Murugappan noted during a recent earnings call that prevailing El Nino conditions, coupled with tight inventories and steady demand, have driven sugar prices upward. He added that prices in August moved above ₹45-46 per kg, and market watchers must wait to see if crushing operations bring a future correction.

Ground reports from correspondents indicate regional variations in retail pricing. In kirana shops, sugar costs ₹74 in Mumbai, ₹75 in Bengaluru, ₹72 in Mangaluru, and ₹78 in Chennai. Conversely, prices have cooled in Kolkata, Hyderabad, and Kochi to ranges of ₹62-65, ₹55-56, and ₹57 respectively. In the Delhi National Capital Region, retail prices range from ₹58 to ₹70.

Retailers in Delhi and Mumbai report that they are constrained by local market pricing and must exhaust existing inventories purchased at higher wholesale rates before reducing prices. Some suppliers in Mumbai have indicated that retail prices may move down to ₹60 a kg as wholesale drops filter through.

The high pricing environment has yielded mixed impacts on consumer demand. While cities like Kolkata, Hyderabad, and Mumbai have experienced a dip in off-take with consumers reducing monthly purchases, regions like Delhi and Kochi have maintained steady demand through the festive periods such as Onam.

Simultaneously, quick commerce platforms including Blinkit, Swiggy Instamart, Amazon Now, and BigBasket have introduced purchase quantity restrictions on select sugar and jaggery brands in specific locations. For instance, Swiggy Instamart in Chennai has limited customers to two units of 1 kg sugar per cart to manage inventory amid high demand, while online prices on other platforms range from ₹65 to upwards of ₹90 per kg depending on the brand and city.

"The current divergence between wholesale and retail sugar prices highlights a classic inventory lag in the supply chain. Retailers holding high-cost stock are naturally hesitant to lower prices until they replenish supplies at lower wholesale rates. For businesses and quick commerce platforms, this scenario underlines the critical importance of dynamic inventory management and predictive pricing models to navigate market volatility and protect consumer demand during festive seasons." — Dr. Shishir Gupta, Founder & CEO, StartupLanes