India, the world's largest sugar consumer, has decided to purchase one million tons of sugar abroad for the first time in nearly a decade due to a sharp rise in domestic prices, according to the BBC.

Over the past two months, sugar prices in the country have increased by almost 40%: while in May and June a kilogram cost around 40-45 rupees, in August the price in some regions exceeded 58-60 rupees, although the growth slowed slightly towards the end of the month.

The price increase was caused by a reduction in the sugarcane harvest forecast to 30,6 million tons for the current season (October 2025 – September 2026), which is 11% less than the government’s initial estimate of 34,3 million tons. Authorities attribute this to reduced rainfall due to El Niño, diseases affecting certain varieties of sugarcane, waterlogged soil due to heavy rains, and traders holding onto stocks.

Experts also note another factor: at the start of the season, India authorized the export of 1,5 million tons of sugar, later increasing the quota by another 500 thousand tons, and almost 800 thousand tons had already been shipped abroad before the suspension of deliveries in May—meaning the transition from allowing exports to requiring imports occurred within a single season.

To supply the domestic market, sugar mills in special economic zones near ports, which typically process raw sugar for export, will be allowed to sell sugar duty-free domestically for three months starting September 1. The Indian Sugar Mills Association also recommended that factories begin processing the new crop two weeks earlier than usual—in October.

Demand for sugar in the country traditionally increases from August onwards due to the festive season – Ganesh Chaturthi, Dussehra, Diwali – and the subsequent wedding season, as well as due to procurement by food and beverage manufacturers.

The Indian market is under additional pressure from overseas supply, with weather-related declines reported in Thailand, Brazil, and Europe. According to US analysts, global sugar production this season will decline to 184,9 million tonnes, down from 186,1 million tonnes a year earlier.