Sugar Ex-Mill Prices Drop 18% Following Government Import and Anti-Hoarding Measures

Sugar ex-mill prices have dropped by 18% to ₹55 per kg after the government permitted raw sugar imports and implemented stock limits. While ex-mill rates have cooled from a record high of ₹67 per kg, the decline has not yet fully reflected in current wholesale and retail market prices.

NEW DELHI — The ex-mill price of sugar has declined by 18 percent to ₹55 per kg following government interventions that allowed imports and clamped down on market speculation, according to Food Secretary Sanjeev Chopra.

Ex-mill prices had previously surged to a record ₹67 per kg, a spike that Chopra attributed to mills artificially increasing rates. Speaking on the price correction, Chopra noted that the rates have started cooling down and are expected to drop further in the coming days.

Government officials stated that the recent price jump was not supported by market fundamentals. Despite domestic production for the 2025-26 marketing year (October-September) declining to 306 lakh tonnes—down from earlier estimates of 343 lakh tonnes—the country maintains ample sugar stocks. Annual domestic demand is estimated at around 280 to 285 lakh tonnes.

To stabilize the market, the central government last week permitted the import of 1 million tonnes of raw sugar, imposed stock limits on bulk consumers, and directed state authorities to intensify inspections to prevent hoarding and speculation. Nationwide flying squads have also been deployed to monitor compliance.

Prakash Naiknavare, Managing Director of the National Federation of Cooperative Sugar Factories (NFCSF), confirmed that no state currently has ex-mill prices exceeding ₹55 per kg. Naiknavare explained that there is typically a ₹2 to ₹3 per kg gap between ex-mill and wholesale prices, and a ₹7 to ₹8 per kg gap between ex-mill and retail prices.

Despite the drop in ex-mill prices, the downward correction has yet to fully filter down to wholesale and retail markets. Data maintained by the Consumer Affairs Ministry shows that the average all-India wholesale price of sugar remained high at ₹58.29 per kg, while the average retail price stood at ₹63.05 per kg.

"Government intervention through targeted imports and strict anti-hoarding measures provides an immediate mechanism to correct supply chain imbalances and curb speculative pricing. However, the time lag between ex-mill price adjustments and their reflection in wholesale and retail markets highlights the complex nature of domestic distribution channels. Ensuring price stability for end consumers will require continued monitoring of inventory levels across the supply chain." — Dr. Shishir Gupta, Founder & CEO, StartupLanes