Centre rules out ethanol diversion as cause
Sugar prices have climbed sharply in Mokokchung, with retail prices reaching around Rs 70 per kg as local retailers report a steep rise in their procurement costs from Assam.
Retailers in Mokokchung town said they were purchasing sugar from Assam at around Rs 50 per kg on July 30, while the purchase price has now risen to approximately Rs 61 per kg. Retail prices in the town have subsequently reached around Rs 70 per kg.
The increase comes amid a broader rise in sugar prices across the country. According to the Ministry of Consumer Affairs, Food & Public Distribution, the average retail price of sugar increased from Rs 48.18 per kg on July 20 to Rs 55.70 per kg on August 20.
The Centre has attributed the recent price rise to a combination of lower-than-expected domestic production, increased demand ahead of the festive season, weather-related damage to sugarcane crops, tightening global sugar supplies, and speculation and hoarding by some sections of the industry.
The government has, however, specifically rejected suggestions that the recent increase in sugar prices is linked to diversion of sugar for ethanol production.
According to the Ministry, the share of sugar diverted for ethanol has actually declined from around 12 per cent in 2022-23 to around 9 per cent in 2025-26. It also stated that nearly three-fourths of ethanol produced in the country now comes from grains, particularly maize.
The government said sugar production in the current season is expected to be around 306 lakh metric tonnes (LMT), against an initial estimate of around 343 LMT by sugarcane-growing States. Production, it said, has been affected by Red Rot and Top Borer disease in sugarcane, as well as waterlogging caused by excess rainfall.
Despite the lower production estimate, the Centre maintained that adequate sugar stocks are available to meet domestic demand until the new crushing season begins in October.
Retailers in Mokokchung, meanwhile, have expressed confusion at the explanation that festive demand is contributing to the present price rise, pointing out that festivals and the resulting demand for sugar occur every year.
They also questioned the extent to which crop damage could explain the current increase, noting that crop losses and damage are not unprecedented occurrences.
The Centre has said the government is taking measures to prevent hoarding and increase domestic availability. A stock limit of 400 tonnes has been imposed on sugar dealers across the country from August 1 to November 30, while from September 1, bulk consumers will not be permitted to hold sugar stocks exceeding 15 days of consumption.
As a precautionary measure, the government has also decided to permit duty-free import of 10 LMT of raw sugar to augment domestic availability.
States and sugar mills have been advised to begin crushing from October 15, which the Centre expects will increase October sugar production and improve availability during the festive season.
The government has also said that joint teams of Central and State officials are carrying out physical verification of sugar stocks at mills to check hoarding and artificial scarcity.
