Sugar Prices Rise 7% As Weak Monsoon Raises Crop Concerns

Sugar prices have witnessed a sharp increase in recent weeks, rising 6-7% during June as concerns over the impact of weak rainfall on sugarcane production pushed prices higher.

At the same time, demand improved after the conclusion of Adhik Maas, a period when festive consumption usually remains subdued.

Maharashtra, India’s largest sugar-producing state, has seen ex-mill sugar prices rise to around ₹41.5 per kg, compared with nearly ₹38.5 per kg a month earlier, according to data from sugar mills in the region.

Prices in the benchmark Kolhapur market also recorded a significant increase. Average sugar tendering prices by mills rose more than 7% between June 7 and July 7, climbing to ₹4,120 per quintal from ₹3,835 per quintal. Retail prices generally follow movements in ex-mill rates.

Industry experts said concerns over sugarcane availability increased in June due to delayed monsoon progress and below-normal rainfall.

The weaker rainfall raised fears that crop conditions could deteriorate, affecting production prospects for the upcoming season.

However, the recent widespread rainfall across several parts of the country has provided some relief to sugarcane farmers.

The improved rains are expected to support standing crops that had faced stress due to prolonged heat conditions and inadequate rainfall earlier in the season.

Despite the recent improvement, concerns remain over future sugar supplies, particularly due to uncertainty surrounding next year’s production.

The possibility of El Niño conditions has added to market worries, prompting the government to take precautionary steps.

To safeguard domestic availability and manage price pressures during the upcoming festive season, the central government banned sugar exports in May.

The move was aimed at ensuring sufficient domestic supplies and preventing further volatility in prices.

Market participants are now closely tracking monsoon progress, sugarcane crop conditions and demand trends to assess the outlook for sugar prices in the coming months.