• Domestic sugar trade: Although mill prices dropped by up to 25%, retail prices remain elevated above ₹63 to ₹64 per kg as retailers resist booking losses. Government enforcement actions, such as raids and storage control orders, have brought trading to a standstill and risk drying up the supply pipeline ahead of the festive season.
• Sugar import viability: High global raw sugar prices mean imported and refined sugar would cost around ₹57 to ₹58 per kg ex-factory, making extensive imports economically unfeasible for easing domestic supply constraints.
• Production and supply: Smooth supply from the new sugar season is expected only post-Diwali due to early labor shortages and low initial recovery rates. Next season's crop outlook remains subdued due to El Niño, patchy rainfall, and drought conditions in key producing regions like Karnataka and Maharashtra.
• Mill operational headwinds: Sugar mills face margin pressure from political and farmer demands for higher cane prices alongside strict government price controls. Furthermore, limits on ethanol diversion will present challenges for mills that lack dual-feedstock capabilities.