KOLKATA, Aug 21: Retail sugar prices in Kolkata have risen sharply to around Rs 70 per kg ahead of the festive season, with traders attributing the surge to higher wholesale prices and tighter supplies.
Sugar prices have increased by around Rs 20 per kg over the past month, including a 10 per cent jump in the last four to five days. Prices of jaggery, batasa and nakuldana have also risen.
The Centre on Thursday allowed sugar mills to import one million tonnes of raw sugar, a step last taken about a decade ago. However, traders said the move has yet to have an impact on retail prices.
The government has also imposed stockholding limits on bulk consumers using more than 10 tonnes of sugar a month, restricting their inventory to 15 days' consumption.
Confederation of West Bengal Trade Association president Sushil Poddar said wholesale sugar prices had already touched Rs 65 per kg and alleged that there was inadequate control over sugar mills.
He also attributed the price rise partly to diversion of sugar towards ethanol production and said the import of one million tonnes would not be sufficient to address the situation, as it represents only about two weeks of domestic demand.
Traders said lower sugar production in Brazil had further contributed to the pressure on prices.
Sweetmeat makers said rising sugar costs, coupled with higher LPG prices, were increasing their production expenses and could lead to further price increases if the trend continued.
West Bengal minister Dilip Ghosh attributed the price rise to hoarding, while an official of a major sugar mill said crushing operations had ended in April and mills were currently releasing available stocks.
According to an ICRA report, gross sugar production in sugar year 2026 is projected to increase by 5.03 per cent to 31.10 million tonnes. However, after an estimated 3.1 million tonnes diverted towards ethanol, net production is expected to remain around 28 million tonnes.
With domestic consumption estimated at 28.3 million tonnes and exports of 0.7 million tonnes already undertaken, closing stocks are projected at around 4.3 million tonnes by September 2026, lower than the 5.3 million tonnes recorded a year earlier.
The report also warned that sugar production in the 2027 season could be affected by El Nino conditions.
