Kejriwal Questions Rising Sugar Prices, ISMA Says Stocks Are Sufficient

Sugar Prices Trigger Political Debate: Kejriwal Questions Ethanol Policy, ISMA Says Stocks Are Sufficient

New Delhi, August 25, 2026: Rising sugar prices in India have triggered a political debate, with Aam Aadmi Party national convenor Arvind Kejriwal questioning the Centre's ethanol policy and its impact on domestic sugar availability. On the other hand, the Indian Sugar and Bio-energy Manufacturers Association (ISMA) has rejected the suggestion that diversion of sugar towards ethanol is responsible for the recent price rise, saying that sufficient sugar stocks are available in the country.

Kejriwal Links Sugar Price Rise to Ethanol Policy

In a recent video message, Arvind Kejriwal raised concerns over the sharp increase in sugar prices. He claimed that sugar, which was selling at around ₹46 per kg about 17 days earlier, had risen to nearly ₹65 per kg.

Kejriwal attributed the increase to the government's ethanol blending policy, arguing that the diversion of sugarcane towards ethanol production has reduced the quantity available for sugar production. According to his argument, lower domestic availability has contributed to higher sugar prices.

He also questioned the broader economic impact of the policy. Kejriwal argued that ethanol blending was promoted partly to reduce crude oil imports and save foreign exchange, but if India has to import sugar because of lower domestic availability, some of those foreign-exchange savings could potentially be offset by sugar imports.

ISMA Rejects Ethanol Link to Price Increase

The sugar industry's response presents a different picture.

ISMA Director General Deepak Ballani said there is no shortage of sugar in the country. According to him, the rise in sugar prices over the past 20 days has largely been driven by panic and speculative buying. He expects prices to cool once such buying pressure eases.

Ballani also rejected suggestions that diversion of sugar towards ethanol was responsible for the recent price increase. He stressed that domestic consumption remains the first priority.

Government Measures to Maintain Supply

ISMA President Niraj Shirgaokar said the association has suggested reducing the sugar stock-holding limit for traders from 400 tonnes to 200 tonnes. The objective is to encourage more stocks to enter the retail market.

According to ISMA, the government has also taken several measures during the past four to six months, including physical verification of stocks at sugar mills and restrictions involving traders, institutional buyers and bulk consumers.

The government has additionally announced imports of 10 lakh tonnes of sugar as a precautionary measure to ensure comfortable domestic availability.

Two Different Explanations for the Same Price Rise

The current debate has produced two contrasting explanations. Kejriwal argues that the ethanol policy and diversion of sugarcane have contributed to reduced sugar availability and higher prices. ISMA, however, says that there is sufficient stock and that panic and speculative buying are the major reasons behind the recent price surge.

The coming weeks will therefore be important for consumers and the sugar industry. If additional supplies reach the market and panic buying declines, prices could ease. However, continued pressure from demand and supply conditions could keep prices elevated.

For consumers, the key question now is whether the recent surge in sugar prices will reverse in the coming days or remain at elevated levels.