By Aadyasha News 
Indian sugar prices have surged around 10% over the past month, reaching record levels as supplies tighten and demand picks up ahead of the festive season. The sharp rise has also put sugar stocks back in the spotlight, with investors betting that stronger sugar realisations could improve the profitability of mills.
Shares of companies including Balrampur Chini Mills, Dhampur Sugar, Dwarikesh Sugar, Triveni Engineering and Bajaj Hindusthan Sugar have seen strong buying interest as the market responds to the changing supply-demand equation.
But there is a catch.
Higher sugar prices may boost mill revenues, but they could also prompt further government intervention aimed at protecting consumers and controlling food inflation.
Why are sugar prices rising?
The biggest factor behind the rally is a shrinking supply cushion.
According to estimates cited by ICRA, gross sugar production during Sugar Year 2025-26 is expected to be around 31.1 million tonnes. However, approximately 3.1 million tonnes could be diverted towards ethanol production.
That leaves around 28 million tonnes of net sugar production.
At the same time, India’s domestic sugar consumption is estimated at approximately 28.3 million tonnes, while around 0.7 million tonnes has already been exported.
This means current production alone is not enough to meet domestic consumption and exports. Existing inventories therefore have to bridge the gap.