Amid rising sugar prices in the country and expectations of increased demand during the upcoming festive season the central government has taken a major step to boost supplies in the domestic market. The government has allowed the duty free import of up to 1 million tonnes of raw sugar until October 31 2026. The move is expected to increase supplies in the domestic market and help ease pressure on prices. However despite the government decision the upward trend in sugar prices is currently showing no signs of slowing in the mandis. Sugar prices have risen by ₹150–200 per quintal driven by weak selling active buying by stockists and mills offering sugar for sale at higher prices. Sugar Prices at Record Highs According to market sources amid the ongoing rally mill delivery sugar prices have risen to ₹5700–5850 per quintal. In the spot market sugar is being quoted at around ₹6100–6200 per quintal. Current prices are among the highest levels seen in the market so far. The Mumbai market has also witnessed a rise due to weak selling. S grade sugar prices increased from ₹5320–5442 to ₹5440–5582 per quintal. Similarly M grade sugar rose from ₹5420–5572 to ₹5550–5682 per quintal. What Are the Reasons Behind the Rally? Several key factors are driving the current strength in the sugar market. Selling remains weak because available stocks in the market are limited. At the same time increased buying by stockists and mills offering sugar at higher prices are providing continued support to prices. Expectations of higher sugar consumption during the upcoming festive season are also strengthening market sentiment. Despite various government measures the impact of additional supply is not yet visible in the market. Jaggery and Shakkar Prices Also Firm Along with sugar the jaggery and shakkar markets are also maintaining their strength. Due to weak supplies and limited selling jaggery Pedi and Chaku are trading around ₹6600–6 700 per quintal while Dhaiya is quoted at around ₹6 900–7 000 per quintal. Shakkar prices are around ₹6800–7000 per quintal while Khandsari is trading at approximately ₹6900–7000 per quintal. Ethanol Diversion Is Also an Important Factor The ethanol diversion policy will also play an important role in determining the direction of the sugar market. Under the government E20 policy which aims to achieve 20 percent ethanol blending in petrol a portion of sugarcane and sugar is being diverted toward ethanol production. If the diversion of sugarcane or sugar for ethanol production increases in the new season the availability of sugar for sale could come under greater pressure. On the other hand if the government prioritizes domestic sugar availability and limits diversion supplies in the market could improve. Will the Sugar Rally Now Come to an End? The decision to allow the duty free import of 1 million tonnes of raw sugar is certainly an important step toward controlling prices but it does not guarantee an immediate decline. The current rally is not being driven by a single factor. Weak supplies strong consumption festive demand high mill selling prices and stock levels are all influencing prices. If domestic availability remains weak in the coming days sugar prices could remain elevated despite the import policy and other government measures. Conversely if imports arrive quickly mills increase their sales and sufficient stocks become available pressure could build on the ongoing rally. What Will Determine the Market Next Move The most important indicators for the sugar market now will be the actual pace of duty free imports domestic mill sales and festive season demand. If the 1 million tonnes of raw sugar arrives on time and additional refined sugar reaches the market through refineries the current rally could lose momentum. However if the arrival of imported sugar is delayed and domestic supplies remain insufficient compared with festive demand prices could stay at elevated levels in the near term. Conclusion The government has opened the way for the duty free import of 1 million tonnes of raw sugar to curb rising sugar prices and prevent a potential surge in inflation during the festive season. For now the impact of this decision is not visible in the mandis where weak selling and active buying by stockists continue to support prices. Going forward the market direction will largely depend on the balance between the arrival of imported sugar and festive season demand.