Congress president Mallikarjun Kharge has questioned the Centre over the sharp rise in sugar prices and declining domestic stocks, raising concerns about sugar imports and the government's ethanol policy ahead of the festive season.

In a post on X on Saturday, Kharge questioned what he described as a contradiction between the government's Atmanirbhar Bharat push and the decision to allow duty-free sugar imports. He asked why sugar stocks in India, one of the world's major sugar producers and exporters, had fallen to a nine-year low and why the government had permitted the import of 10 lakh tonnes of sugar without duty.

Kharge also questioned the diversion of sugarcane towards ethanol production for petrol blending while India was importing sugar to meet domestic requirements. He raised three questions for the Centre amid the increase in sugar prices, which, according to the figures cited in the report, have risen by ₹19 per kg over three months and are around 40% higher.

Centre Rejects Ethanol Link

The Ministry of Consumer Affairs, Food and Public Distribution has rejected the claim that the increase in sugar prices was linked to the diversion of sugar towards ethanol production.

According to the ministry, the proportion of sugar diverted for ethanol production declined from around 12% in 2022-23 to about 9% in 2025-26. It also said that nearly three-fourths of India's ethanol production now comes from grains, particularly maize.

The government attributed the recent rise in sugar prices to several factors, including lower domestic production, increased demand ahead of festivals, weather-related crop damage, tight global supplies and alleged hoarding and speculative activity.

Sugar Production Estimate Cut

India's sugar production for the current season has been estimated at 306 lakh metric tonnes (LMT), significantly lower than the earlier projection of 343 LMT.

The reduction has been attributed to crop damage caused by diseases such as red rot and top borer, along with waterlogging following excessive rainfall in several sugarcane-growing regions.

Despite the downward revision, the Consumer Affairs Ministry said domestic sugar stocks would remain adequate to meet the country's requirements until the beginning of the new crushing season in October.

Global Shortage Adds Pressure

International market conditions have also contributed to the rise in sugar prices. The global sugar market is estimated to face a deficit of around 33 LMT in 2026-27, adding pressure to international prices.

International sugar prices increased from around $474 per tonne on June 30 to $552 per tonne on August 20, representing a rise of more than 16% in less than two months.

The increase in global prices comes at a time when domestic demand is expected to rise during the upcoming festive season, putting additional pressure on the Indian sugar market.

Centre Tightens Stock Limits

The government has also introduced measures aimed at preventing hoarding and speculative activity in the domestic market. A 400-tonne stock limit has been imposed on dealers until November 30.

A separate 15-day stock limit for bulk consumers will come into effect from September 1. The Centre and state governments have also formed joint teams to physically verify sugar stocks at mills.

The government says the inspections are intended to ensure accurate reporting of available stocks and prevent artificial shortages in the domestic market.

With sugar prices rising ahead of the festive season, the issue has now become a point of political confrontation, with Kharge questioning the Centre's import and ethanol policies while the government attributes the price increase primarily to lower production, weather damage, global market conditions and demand-related factors.