Sugar prices hit Rs 70 a kg in Kolkata ahead of festive season

Retail sugar prices have climbed to Rs 70 a kg in Kolkata, rising by Rs 20 over the past month as demand builds ahead of the festive season, traders said on Friday.

The market has witnessed a particularly sharp increase over the past four to five days, with prices jumping by around 10 per cent. Sugar-based products such as jaggery, batasa and nakuldana have also become more expensive.

A neighbourhood grocery shop owner said loose sugar, which was selling for Rs 65 a kg just three days ago, could no longer be offered below Rs 70.

Confederation of West Bengal Trade Associations president Sushil Poddar said wholesale prices had already reached Rs 65 a kg and alleged that sugar mills were not being adequately regulated.

Poddar identified the diversion of sugarcane towards ethanol production as one of the factors behind the increase. He also raised concerns about the impact of higher ethanol blending on vehicles.

“The sudden sugar price spike ahead of the festival season, between September and November, is a matter of concern,” he said.

The Centre on Thursday allowed sugar mills to import one million tonnes of raw sugar, the first such measure in about a decade. Traders said the decision had yet to influence retail prices.

Poddar argued that the permitted quantity would not be sufficient to contain the increase, claiming that one million tonnes represented only about a fortnight of domestic demand. He called for further government intervention.

The Centre has also imposed a stockholding limit on bulk consumers using more than 10 tonnes of sugar a month. Such buyers will be permitted to maintain inventories equivalent to no more than 15 days of consumption.

Lower sugar production in Brazil has added to supply concerns, according to traders.

Sweetmeat makers are also facing higher input costs. Shop owners said the sugar price surge had added to the pressure created by an earlier liquefied petroleum gas shortage and price increase. They warned that sweet prices could rise if sugar remained expensive for an extended period.

West Bengal minister Dilip Ghosh attributed the increase to hoarding rather than the diversion of sugarcane for ethanol.

An official at a leading sugar producer, however, said crushing had concluded in April, and mills were now releasing existing stocks, leaving them with limited scope for further action.

Rating agency ICRA projected in May that gross sugar production would increase by 5.03 per cent to 31.10 million tonnes in sugar year 2026, from 29.6 million tonnes in the preceding season.

After an estimated 3.1 million tonnes is diverted for ethanol production, net output is expected to remain at 28 million tonnes. With domestic consumption projected at 28.3 million tonnes and 0.7 million tonnes already exported, closing stocks could fall to 4.3 million tonnes by September 2026 from 5.3 million tonnes a year earlier.

The estimated inventory would cover approximately two months of consumption, indicating tighter availability than in previous years. ICRA also warned that El Niño could affect the 2027 season and lead to lower production.

With PTI inputs