New Delhi, Aug 24 (PTI) Sugar industry's apex body ISMA on Monday asserted that there is no shortage of sugar in the country and said the prices in the retail market are expected to decline in the coming days following the government's decision to allow imports besides imposing stock holding limits on traders and bulk consumers.

On Monday, the average all-India retail prices of sugar stood at Rs 63.05 per kg, 29 per cent higher than Rs 48.73 per kg a month back. The maximum retail price on Monday stood at Rs 75 per kg, while the model price was hovering at Rs 65 per kg, according to the government data.

Addressing a press conference, Indian Sugar and Bio-Energy Manufacturers Association (ISMA) President Niraj Shirgaokar said the prices have risen due to various factors, including speculative buying by traders and bulk consumers as well as lower production than estimated.

"India does not have a sugar shortage. Our production and stock position remain fundamentally comfortable," he told reporters.

The country's net sugar production (after diversion to ethanol) is estimated at around 279 lakh tonnes in the 2025-26 marketing year (October-September), while the opening stock was 50 lakh tonnes. The annual domestic demand is seen at 280-285 lakh tonnes while the country exported 8 lakh tonnes of sweetener before the government imposed a ban.

Shirgaokar projected the closing stock of roughly 35 lakh tonnes at the end of September.

"That is a healthy buffer against normal domestic demand, even after accounting for sugar diverted to ethanol," he added.

The government's duty-free import window, tightened stockholding limits, ongoing special crushing, and an early start to the new season would help in augmenting domestic supply and control prices, the ISMA President said.

Shirgaokar pointed out that the average retail prices have risen but said the "increase is not being driven by any actual shortfall in availability".

He noted that the prices have started to ease following the government's decision to allow duty-free imports of 1 million tonnes of raw sugar and also stock holding limits on dealers as well as bulk consumers.

The ex-mill prices have eased in the last few days and are currently ruling at around Rs 55-56 per kg in two major sugar-producing states -- Maharashtra and Uttar Pradesh, he said.

"India's sugar balance is fundamentally comfortable. The recent price rise reflects a combination of weather effects, festive demand, global tightening, and - most significantly - speculative stocking, rather than any real gap in supply," he said, adding that the supply should remain stable through the festive period.

Asked about the government putting blame on industry for jacking up ex-mill prices, ISMA president categorically said that the industry was not involved in creating any artificial scarcity and increasing rates.

However, he did not rule out that some mills might be holding stocks and said the government is looking into that.

Shirgaokar said the mills sold 75-80 per cent of their stocks in the current marketing year at a loss, and they might achieve break-even.

Elaborating on the reason for the surge in prices, Shirgaokar said, "The rise reflects several factors coming together, not one single cause. Domestic output for the season came in below initial projections." The gross sugar production (before diversion to ethanol) was revised to around 309 lakh tonnes from the initial estimates of 345 lakh tonnes mainly due to weather-related effects, lower cane yield and lower recovery, including a higher crush rate in Maharashtra and red-rot-related varietal issues in Uttar Pradesh, he added.

Festive-season buying has also picked up, as it does every year. Globally, lower estimated sugar production in Brazil has tightened supplies and pushed international prices from around USD 474 a tonne in June to around USD 552 a tonne by August.

"But the largest contributor has been speculative behaviour. A section of traders created a misleading impression of tightness, and in response, large bulk buyers who would normally procure just-in-time began stocking 1.5 to 2 months of supply in advance. That behaviour pulled sugar out of circulation and into godowns, creating artificial tightness that had nothing to do with actual availability," Shirgaokar said.

The ISMA president noted that the government has taken a proactive and precautionary step to allow duty-free imports of raw sugar and said this measure is not an admission of a shortfall. "Its role is to stabilise sentiment." The association also demand that the stock holding limit on traders, currently 400 tonnes, should be brought down further to 200 tonnes.

"Owing to the corrective measures taken by the government, sugar prices have eased over the past few days and are expected to soften further in the coming days, ensuring adequate supplies at affordable prices during the festive season," Shirgaokar said.

The ISMA president also sought to reject an assertion that diversion of sugar to make ethanol was responsible for the price hike.

"The Ethanol Blending Programme is not competing with food-grade sugar, and it is not responsible for the current price movement...This year, around 29 lakh tonnes have been diverted through Quarter 3, with the full season expected to settle around 30 lakh tonnes, well within our historical range of 20–40 lakh tonnes," he said.

Further, the share of ethanol from the sugar sector has decreased to 25 per cent in 2025-26, against over 80 per cent in 2021-22, while the majority share is being supplied by the grain sector.

On the next 2026-27 marketing year starting in October, Shirgaokar said two industry bodies, ISMA and NFCSF, are working to advance the start of the 2026–27 crushing season by 10 to 15 days.

"Special crushing is already underway in Tamil Nadu and Karnataka. Together with existing stocks and the import window, this earlier start is expected to lift October sugar production to around 10 lakh tonnes, against a normal figure of about 4 lakh tonnes — injecting real, fresh supply precisely when festive demand peaks," he said.

Asked about imports, Shirgaokar said the imports are viable, and the raw sugar is expected to come into India by October. PTI MJH HVA