High Quotas Unlikely to Lead to a Rise in Sugar Prices

24-Jan-2026 12:19 PM

New Delhi. Attention is focused on the monthly free sale quota for sugar for February 2026, which is expected to be announced next week.

The monthly domestic sales quota of 22 lakh tonnes each for December 2025 and January 2026 has weighed heavily on the market. A major reason for this is weak demand.

According to industry analysts, the cold weather in December and January led to weak industrial demand for sugar, and the absence of the wedding and festive season provided little support to the market.

The government's rule requiring mills to sell the entire quota is also affecting millers. However, market signals have not been encouraging either.

During the current marketing season (October-September) of 2025-26, domestic sugar production is estimated to jump by 18-20 percent to 310-315 lakh tonnes, which could significantly increase the industry's surplus stock.

In such a situation, the government will be free to release monthly free sale quotas of sugar to control domestic market prices and will not have to worry about a shortage of stock.

Temperatures are expected to start rising from February, which could lead to an improvement in industrial demand for sugar. If the monthly quota is kept low, prices might firm up somewhat.

In Maharashtra, the ex-factory selling price of sugar has fallen to a low of Rs 3550-3600 per quintal, which is significantly below its cost of production. This is making the monthly situation increasingly precarious for sugar mills.