Sugar Mill Tender Rates Drop by ₹500 a Quintal While Retail Prices Reach ₹60.26 a kg

Sugar prices sold by mills through tenders saw a decline of ₹500 a quintal on Saturday, while retail rates continued to climb to a new high of ₹60.26 per kg, according to trade sources and government data.

In Maharashtra, Solapur-based Loknete Baburao Patil Agro Industries Ltd sold S-30-grade sugar at ₹5,850 per quintal, offering 70 tonnes at that rate. In another tender, prices for S-30 dropped to ₹6,100 a quintal from ₹6,600 on Friday, while rates for M-30 grade slipped to ₹6,225 from ₹6,725.

Despite the dip in tender prices, retail rates surged by over ₹2 a kg on Saturday from ₹58.23 on Friday, based on data from the Price Monitoring Division of the Department of Consumer Affairs. Trade sources indicated that retail prices are expected to begin reflecting the decline in tender prices starting Monday.

Food Secretary Sanjeev Chopra stated that the recent rise in sugar prices is not supported by market fundamentals, describing the availability and stocks of domestic sugar as ample and adequate. Chopra termed the price surge unjustified, noting that ex-mill prices increased from ₹48 to ₹62 per kg within a short period, which he attributed to speculation, hoarding, and profiteering.

According to the Food Secretary, ending stocks are projected at a comfortable 33 to 35 lakh tonnes, while early crushing starting around October 15 is expected to add 10 to 12 lakh tonnes to meet festive season demand. Sugar prices have risen by over 35 per cent since June due to concerns over supplies meeting domestic demand ahead of October.

To combat rising prices, the Centre has permitted the duty-free import of 1 million tonnes of raw sugar. Additionally, the government has stipulated that bulk users consuming over 10 tonnes of sugar a month cannot hold more than 15 days of stock starting September 1.

Sugar production for the current season spanning October 2026 to September 2027 is estimated at around 306 lakh tonnes, which includes diversion for ethanol, compared to initial estimates of approximately 343 lakh tonnes. Furthermore, 8 lakh tonnes of sugar were exported before the Centre imposed a ban.

"The divergence between falling wholesale tender rates and rising retail prices highlights supply chain friction and speculative pressure in the market. When essential commodities experience artificial volatility driven by hoarding, government interventions like stock limits and duty-free imports become critical tools to stabilize prices. For businesses and bulk consumers, navigating these regulatory shifts requires careful inventory planning and compliance with newly enforced storage caps." — Dr. Shishir Gupta, Founder & CEO, StartupLanes