Tightening supplies and cautious outlooks from industry leaders suggest India’s recent sugar price surge may be short-lived, with festival demand and import costs adding complexity to the market’s outlook.
India’s sugar market is running hot as tight supplies push mill prices sharply higher, but traders and industry executives say the rally may not last in a straight line. In Muzaffarnagar, M-grade sugar has climbed to about Rs 5,500-5,650 per quintal, up from roughly Rs 4,050-4,150 in early June, while prices in Maharashtra have risen from around Rs 3,800-3,850 to Rs 5,350-5,550 over the same period. Recent market updates from Chinimandi showed prices were still relatively steady in late June before the latest surge gathered pace.
Atul Chaturvedi, director of Shree Renuka Sugars, said the rise was the result of shrinking inventories after weak production, with El Niño adding to concern about the next crop. He argued that official assurances about adequate stocks had only underlined what the market already knew: supplies were getting tighter. According to his assessment, mills are also constrained by government rules that prevent them from hoarding stock and waiting for better prices, which can force sales even when margins are thin.
Chaturvedi said prices are likely to stay elevated, but he expects festival demand to soften the rally rather than extend it indefinitely. He said institutional buyers account for about 65% of total sugar consumption, and many of them may already have covered their seasonal needs. That view is consistent with broader market estimates showing India’s domestic sugar consumption rising towards 30 million tonnes in the 2024-25 marketing year, compared with 29 million tonnes in 2023-24, which has left less room for surplus supply.
On imports, Chaturvedi warned that any move to bring in sugar now could lift global prices while doing little to ease domestic pressure in the short term. He said import costs are already high because of relatively weak rupee levels, and Brazilian raws bought now would likely arrive during the crushing season, when fresh domestic supply begins to flow. Market data from late June also showed Indian sugar trading in a far narrower range than the current levels, suggesting the latest jump has been driven by a sharper tightening in supply conditions.
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