Sugar prices jump Rs 4,000 per MT in a month as supply concerns lift mill earnings
Maharashtra’s S-grade sugar prices rose ₹4,000 per tonne to ₹42,000, driven by weak monsoon, El Niño concerns and tighter supplies. If sustained, mills could earn ₹11,000 crore in additional seasonal revenue, with festive demand expected to keep prices firm.
Kolhapur: Sugar prices have surged by Rs 4,000 per metric tonne over the past month, boosting the earnings of sugar mills as concerns over lower-than-expected monsoon rainfall, El Niño and tighter domestic supplies drove up market prices.
The price of S-grade sugar in Maharashtra has increased from Rs 38,000 per metric tonne a month ago to Rs 42,000 per metric tonne, reflecting a sharp rise in domestic sugar prices.
The higher prices are expected to significantly improve the financial performance of sugar mills. Industry estimates that if current prices persist, mills could earn around Rs 11,000 crores in additional revenue during the coming sugar season.
Industry experts said concerns over the standing sugarcane crop intensified during June after the monsoon arrived late and rainfall remained below normal in several sugarcane-growing regions, raising fears over crop health and next year’s sugar production.
Hemant Shah, Director of JK India eAgriTech Ltd, said, “Sugar prices are likely to remain firm over the next few months due to an increase in sugar demand during the festive season.”
“The Centre imposed a ban on sugar exports in May, citing concerns over ensuring adequate domestic supplies during the festive season and the potential impact of El Niño on next year’s sugar production. The export restriction, coupled with weather-related concerns, has contributed to expectations of a tighter sugar balance sheet, supporting domestic prices,” he said.
“In July 2025, the government allocated a monthly sugar sale quota of 22 lakh metric tonnes (LMT) for the domestic market, while in June 2026, the allocation was 22.5 LMT. Considering the increase of Rs 4,000 per metric tonne in sugar prices, sugar mills are expected to earn around ₹1,000 crores in additional revenue this month from the sale of the allocated quota,” Shah added. Domestic sugar sales in August are expected to be in the range of 2.3-2.4 million tonnes (23-24 lakh tonnes).
The price indication was given long back in June 2026 at the ChiniMandi organised Sugar, Ethanol and BioEnergy Conference (SEIC 2026) in Mumbai. At the panel discussion on ‘Chini: Tezi or Mandi’ industry veterans and experts spoke about a possible price uptick mainly due to lower sugar availability.
Industry estimates indicate that if sugar prices remain close to current levels throughout the season, the sugar industry could earn around Rs 11,000 crore more than last year through higher sugar realisations.
Widespread rainfall in recent weeks has improved soil moisture and is expected to ease stress on sugarcane fields that had been affected by prolonged heat and inadequate rainfall earlier in the season. However, sugar production is still expected to remain lower, keeping pressure on domestic supplies and supporting higher sugar prices in the coming months.
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Source : ChiniMandi
