Al Jazeera English ·
‘Poor bear the impact’: Sugar prices soar in India, souring festive season
India is one of the world's largest sugar consumers, but usually produces much more.
Jai Krishan, a 43-year-old labourer from Bihar in northern India, has saved 15,000 rupees ($160) to travel home from Indian-administered Kashmir, where he works, to celebrate Diwali with his family in November.
Each year, he buys boxes of sweets — laddu, barfi and kaju katli — to take home as gifts for his family and friends. He spends about $35 just on sweets for Diwali, he says, as he prepares afternoon tea for himself and his roommates in their rented accommodation in the Hawal area of Srinagar, Indian-administered Kashmir’s largest city.
“For someone from a lower-middle-class family, this is a lot of money. But Diwali is one of the most important festivals for Hindus and you cannot skip celebrating it,” he says.
This year, though, Krishan fears he may have to cut back on other purchases — such as toys and clothes — to keep his limited budget under control. The price of sugar has risen sharply in recent months, with retail prices reaching as high as 75 rupees ($0.79) per kilogramme (2.2 pounds) — up from 40 rupees in September 2025 — in some markets, raising concerns that the cost of sweets could also increase.
“I can reduce my spending on clothes or other things, but I cannot return home without bringing sweets for my family,” Krishan said.
The price rise comes as India enters its festival season. Celebrations begin in late August with festivals such as Ganesh Chaturthi and Onam, before gathering pace in October and November with Navratri, Durga Puja, Dussehra and Diwali, popularly known as the festival of lights.
India’s sweets sector is worth more than $1.1bn, with peak festive sales accounting for more than 40 percent of annual revenue. Traditional sweets can contain 30 to 60 percent sugar by weight, making sugar a major ingredient. India is the world’s largest consumer and second-largest producer of sugar.
The country consumes between 29 million and 32 million metric tonnes of sugar each year, roughly 15 percent of global consumption. But it produces about 20 percent of the world’s sugar, second only to Brazil — an amount that means that the country usually has enough supplies of sugar for its needs, with some to spare for exports.
Not this year.
Sugar production, according to government data, is expected to be about 30.6 million tonnes in the current season, which runs from October 2025 to September 2026. This is 11 percent lower than the government’s earlier estimate of 34.3 million tonnes.
The government attributes the lower production mainly to a decline in sugarcane cultivation and lower rainfall during the El Nino weather pattern. It has also accused hoarders of storing extra sugar once the effects of El Nino became clear, to further tighten supplies in a bid to earn extra profits.
But Mukesh Chandra, a sugarcane farmer from Punjab, says several other factors have contributed to the fall in production and the rise in sugar prices.
He points to a shift by some farmers from sugarcane to other crops, high labour costs coupled with low returns from sugarcane farming, and the diversion of sugarcane to ethanol production as among those reasons.
“These factors have led to a decline in the amount of sugarcane available for processing, putting pressure on sugar supplies and pushing up prices,” Chandra told Al Jazeera. “Why would a farmer cultivate a product that is going to give him less returns?”
The Indian government, however, has rejected the claim that diverting sugarcane to ethanol production under its ethanol blending programme has contributed to the surge in sugar prices. It pointed to figures showing that the share of sugar diverted to ethanol has fallen from about 12 percent in 2022-23 to about 9 percent in 2025-26, with nearly three-quarters of India’s ethanol now made from grains such as maize.
India introduced ethanol blending to reduce its dependence on expensive crude oil imports, strengthen energy security and increase farmers’ incomes by creating a market for surplus crops. The initiative is also intended to reduce vehicle emissions and support the country’s broader decarbonisation goals.
Regardless of the Indian government’s assertions, Chandra argues that the economic logic of sugarcane farming works against cultivators.
He estimates that producing 100kg of sugar costs about 470 rupees ($4.90), including expenses for labour, irrigation, cultivation and transportation, as well as the extraction of sugarcane juice and its processing into sugar. But the return is only about 416 rupees, leaving farmers with a loss of approximately 54 rupees per 100kg. He said sugarcane farmers also do not receive the same level of support available to farmers growing crops such as paddy — particularly with fertilisers, diesel and electricity.
The United States-Israeli war on Iran has also complicated economic equations for farmers, with fuel prices — and so, electricity costs — rising. The inflation due to the war “has added a further burden on our shoulders,” Chandra said. “The rise in fuel prices has increased the cost of running water pumps used to irrigate sugarcane fields, adding to farmers’ expenses at a time when their margins are already low.”
Suresh Pal, another sugarcane farmer from the state of Uttar Pradesh, agrees that sugarcane production is declining. He attributes the current shortage and price rise to a combination of agricultural and climate-related challenges faced by farmers in the state.
Farmers in Uttar Pradesh remain heavily dependent on the Co-0238 variety of sugarcane, which, Pal said, has become increasingly vulnerable to diseases such as red rot fungus and pest attacks. He added that continuous cultivation and the heavy use of chemicals have also contributed to soil degradation, while the crop’s high water requirements have put further pressure on the state’s groundwater resources.
“We are facing problems from many sides. The varieties we depend on are becoming vulnerable to diseases, the soil is losing its strength and water is becoming harder to manage,” Pal told Al Jazeera. “And at the same time, the cost of farming is increasing. Fertiliser, pesticides, labour and irrigation are all becoming expensive,” he added.
For small farmers, Pal believes, the financial strain is made worse by delayed payments from sugar mills, leaving them with little money to invest in better seeds, modern farming methods and new technologies. “When the mills delay our payments, how can a small farmer invest more in his fields?” Pal said. “Our costs keep rising, but the money we earn from farming is not increasing at the same pace. This is making it difficult for people like me to continue cultivating sugarcane.”
To manage domestic supply, the government has authorised the duty-free import of one million tonnes of raw sugar, with a cap on rates, until October 31, 2026. The move is aimed at easing supply pressures ahead of the festival season.
“The measure is best understood as a price ceiling rather than a price cut,” said Sanjay Kumar, professor of economics at Delhi University. The government waived heavy import duties to allow the import of sugar at about $0.55 per kg. “That price now limits how high domestic sugar can go, because once imported sugar is cheaper, no mill can hold its own price above the landed cost for long,” Kumar added.
But so far, that strategy doesn’t seem to be working.
That, Kumar said, is because the imports are of raw sugar; the domestic Indian market demand is primarily for refined sugar.
Aman Jaswal, a resident of Patna in Bihar, said sweets were costing 15 to 20 percent more this year. “Sweets are closely tied to happiness in Indian culture. Whether it is Diwali, a wedding or a religious occasion, we rarely celebrate without them,” Jaswal said. “Even prasad [the sweets offered during religious rituals] is shared among people. Gifting sweets is a way of sharing happiness and it has become part of our celebrations and relationships.”
Back in Srinagar, Krishan, the labourer, has already started thinking about what he can sacrifice this year to be able to afford sweets for his family back home.
He has taken to walking to work, instead of taking public transport.
“My workplace is about eight kilometres from my room but I walk to save 50 rupees ($0.52) a day for the happiness of my family,” he said. “What difference does it make to the rich? They will celebrate the festival with great pomp and show anyway. It is poor people like me who will bear the impact.”