Duty Free Sugar Imports on the Anvil as Domestic Price Hits 54 Rupees per Kilo

· Government weighs intervention: India is considering several measures to increase sugar supplies and bring down record domestic prices ahead of the August–November festival season.

· Possible duty-free imports: The government may allow limited sugar imports, potentially for the first time in nearly a decade. One proposal is to permit mills to import up to 1 million tonnes duty-free before the end of October.

· Other measures under consideration:

o Reduce the quantity of sugar that bulk traders can hold.

o Lower or temporarily remove import duties.

o Adjust monthly sugar-release quotas for domestic sales by mills.

o Encourage port-based refineries to release some stocks into the domestic market.

· Domestic prices have surged: Wholesale sugar prices in Kolhapur, Maharashtra, have risen nearly 20% since the beginning of August, reaching a record ₹5,350 per 100 kg.

· Festival demand is a key concern: Consumption normally rises sharply from August through November because of Ganesh Chaturthi, Dussehra and Diwali, boosting demand for sweets and confectionery.

· Government says supplies are technically adequate: Officials believe there is enough sugar to meet domestic demand until new-season supplies arrive, but tight local availability is contributing to the price surge.

· Traders favor imports: The Bombay Sugar Merchants Association says imports are the quickest way to increase availability and moderate prices during the festival period.

· Raw sugar likely to dominate imports: Mills would probably prefer raw sugar, because high international white-sugar prices leave little or no margin for importing refined sugar.

· Existing refinery mechanism could provide additional supply: Some Indian port-based refineries can already import raw sugar duty-free provided they export an equivalent quantity of refined sugar.

· Around 300,000 tonnes could potentially be diverted: The government could ask these refineries to redirect some existing stocks to the domestic market, potentially releasing about 300,000 tonnes.

· Ethanol policy may also be adjusted: The government is separately considering restricting the amount of sugarcane diverted toward ethanol production in the new season beginning in October, thereby increasing sugar output.

· Global market impact: If India enters the international market for significant volumes, imports could support London and New York benchmark sugar prices, while simultaneously easing India's domestic prices.

Bottom line

India is facing a short-term sugar-supply squeeze rather than an outright shortage. With festival demand approaching and domestic prices at record levels, the government appears increasingly willing to use duty-free imports, stock limits and changes to sugar allocation and ethanol policies to cool prices. A potential 1-million-tonne import programme would be particularly significant because India has largely stayed out of the global import market for years.

[ABS News Service/20.08.2026]

India is considering measures to bolster sugar supplies and rein in record prices, such as limited duty-free imports and curbs on the amount of stocks held by bulk traders, potentially allowing in overseas shipments for the first time in nearly a decade.

Imports by India, the world's biggest sugar consumer, could support benchmark prices in London and New York, while helping New Delhi rein in domestic prices during the August to November festival season when demand rises.

"Since there has been a completely unwarranted increase in prices, we will have to ⁠take measures to check prices, and we are considering a whole host of measures and tools," said a government source who spoke on condition of anonymity, citing official rules.

Measures being discussed include lowering the amount of stockholdings, allowing limited imports, cutting import duties and adjusting monthly sugar allocations for domestic sales by mills, he said.

Wholesale sugar prices in Kolhapur, a key trading hub in the western state of Maharashtra, have risen nearly a fifth since the start of August to a record 5,350 rupees ($56) per 100 kg.

The increase comes despite sufficient supplies to meet domestic demand until next season's arrivals start coming into the market, a second government source said.

"Local supplies are tight. Only imports can help increase supplies and bring down prices during the festival season," said Ashok Jain, president of the Bombay ⁠Sugar Merchants Association.

Mills Could Import 1 Million Tons of Sugar

India's sugar demand typically rises from August to November when it holds major festivals such as Ganesh Chaturthi, Dussehra and Diwali, when consumption of traditional sweets and confectionery increases.

Last week, Reuters reported that India was considering curbing the amount of sugarcane used to produce ethanol in the season beginning in October to boost sugar output and tame high prices.

The government could ask mills to import ⁠1 million metric tons of sugar duty-free before the end of October, as new-season supplies start trickling in by November when cane crushing gathers pace, said a Mumbai-based dealer with a global trade house, who declined to be named because he was not authorised to speak to the ⁠media.

"Mills will try to import only raw sugar, as white sugar prices are very high and there is hardly any margin in importing white sugar," the dealer said.

India has a handful of port-based sugar refineries that are allowed to import raw sugar duty-free ⁠on the condition that they export an equivalent volume of refined sugar.

The government could also ask these refineries to divert some of their stocks to the domestic market, potentially releasing about 300,000 tons of sugar locally, said a New Delhi-based dealer who also spoke on condition of anonymity.