India: Sugar prices jumped by 40% before the holiday season, the government took emergency measures

India has sufficient sugar stocks to meet demand during the holiday season, and the price surge to a record high is due to speculative buying rather than an actual shortage in supply, said the president of the country's largest sugar producers' association today. Sugar prices in India, the world's largest sugar consumer, have jumped by more than 40% within two months and reached a peak. Consequently, New Delhi has permitted the duty-free import of one million tons of raw sugar, for the first time in nearly a decade.

"Sugar stocks and supply are at very comfortable levels, and there will be no problem meeting the higher demand during the holiday season," said Niraj Shirgaoka, president of the Indian Sugar Mills Association.

Demand for sugar in India usually rises between August and November, during major holidays such as Ganesh Chaturthi, Dussehra, and Diwali, when the consumption of sweets and traditional confectionery increases. Shirgaoka said that any shortage existing in the market is artificial and caused by speculative buying, and that the government's measures, including the permit to import one million tons of sugar, are intended to calm the market.

According to him, India produced 27.9 million tons of sugar in the marketing year ending on September 30, slightly below the annual consumption of 28-28.5 million tons, but above the output of 26.1 million tons last year. Sugar mills diverted about 3 million tons of sugar this year for ethanol production and exported about 800 thousand tons, out of an allowed export quota of 2 million tons, he said. India is expected to start the new marketing year with stocks of about 3.5 million tons of sugar, compared to 5 million tons at the beginning of the previous year.