The government is considering lowering or scrapping its 100% import duty on sugar to lower prices in the domestic market and boost local supply ahead of the festive season, Bloomberg reported today citing people in the know.
Sugar prices recently hit a record high in India, which is the world’s second-largest producer of the commodity and they added that officials feel the move could boost local supplies with import shipments, the report added.
The report said that discussions and deliberations are confidential and come ahead of the festive season, which typically sees large demand for sugar and subsequent rise in price for the commodity annually.
Spokespersons for the food and commerce ministries did not immediately respond to queries, the report added.
The report noted that there is a global supply strain in the sugar market and concerns are increasing that the El Niño weather phenomenon will impact harvests. Recently, similar speculation pushed New York futures to the highest in about a year.
The same worries are reflected in India, where monsoon rains are 13% below normal levels, according to the India Meteorological Department (IMD). It added that sugarcane crops — used to produce majority of India's sugar — are dependent on the rainfall.
The deficit stood at more than 40% near the end of June 2026 (start of the annual rainy season) and has delayed sowing of some crops, it added.
Ex-mill sugar prices in Maharashtra recently hit about ₹46 per kilo, an all-time high, according to the Indian Sugar and Bio-energy Manufacturers Association, or ISMA. Consumption in India typically peaks from late August through January as demand rises for traditional sweets, processed foods and beverages during the festival season, the report said.
Factories in India’s top sugarcane-producing states of Uttar Pradesh and Maharashtra plan to bring forward crushing by 10 to 15 days from the usual early-November start, following consultations with the food ministry, to bolster supplies. The government also recently imposed stockpile limits on traders to discourage hoarding and contain inflation risks.
India does not usually import sugar for domestic consumption, last bringing in substantial volumes in 2017-18, ISMA data shows.
Sugarcane was planted on 5.83 million hectares (14.4 million acres) as of 14 August, slightly below the level at this time last year, according to the farm ministry.
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