New Delhi: With the festive season approaching, rising sugar and jaggery prices are putting additional pressure on household budgets across India. Over the past 15 days, sugar prices have increased by around Rs 17 per kg, while jaggery prices have surged by nearly Rs 40 per kg. Retail prices of jaggery have reportedly risen from around Rs 60 per kg to nearly Rs 100 per kg in just a few days.
Sugar, which was selling at around Rs 48 per kg, is now being sold at Rs 62-65 per kg in several markets. The sharp rise is also affecting the cost of sweets, beverages, bakery products and other food items that use sugar and jaggery as key ingredients. Almond prices have also increased, with the retail price rising from around Rs 900 per kg a month ago to nearly Rs 1,100 per kg.
The sudden increase in sugar and jaggery prices has raised concerns among consumers, retailers and food businesses ahead of the festive season. Sweet shops, confectionery manufacturers, bakeries, tea shops and small food businesses are likely to face higher input costs if prices remain elevated. Some traders have also expressed concerns that prolonged supply tightness could encourage hoarding and black-market activity.
Sugar and Jaggery Prices See Sharp Increase
According to retail trader Praveen Goyal, jaggery was selling at around Rs 60 per kg about 15 days ago but has now reached nearly Rs 100 per kg. During the same period, sugar prices increased from around Rs 48 per kg to Rs 62-65 per kg. The increase is particularly significant because demand for sugar, jaggery and other ingredients typically rises during the festive season.
The higher prices could have a wider impact on consumers because sugar and jaggery are widely used in sweets, dairy products, beverages, bakery items and several packaged food products. Rising raw material costs may eventually be passed on to consumers through higher prices of finished food products. 
Why Are Sugar Prices Rising?
A wholesale trader said domestic sugar production has fallen short of earlier expectations. According to the trader, production was expected to reach around 3.20 lakh tonnes, but actual output was closer to 2.80 lakh tonnes. Sugar exports also contributed to supply pressure, although the government has now restricted exports in an effort to improve domestic availability and control prices.
Despite these measures, sugar prices have continued to remain firm. According to market participants, wholesale sugar prices have increased by around Rs 15 per kg over the past two months. The government also introduced stock limits for traders from August 1 to prevent excessive stockpiling and improve market availability.
Under the stock-limit framework, traders are required to sell their permitted quantity within the specified period. The government expects such measures to discourage hoarding and ensure a steady supply of sugar in the domestic market.
Ethanol Diversion Adds to Sugar Supply Concerns
Market participants also point to ethanol production as one of the factors affecting sugar availability. A portion of sugarcane is diverted towards ethanol production, reducing the quantity of sugar available for the market. With sugar prices already elevated and festive demand expected to increase, the balance between sugar production and ethanol production has become an important issue for the industry.
If prices remain high, the government may have to consider additional measures to improve domestic sugar availability ahead of the major festive period. Consumers and food businesses will be closely watching sugar prices in the coming weeks, particularly as demand rises ahead of Diwali and other festivals.
