India, Aug. 21 -- The government on Friday rejected claims that ethanol production was driving the recent surge in sugar prices.

"It is incorrect to attribute the recent increase in sugar prices to diversion of sugar for ethanol production," the Ministry of Consumer Affairs, Food & Public Distribution said in a statement.

According to the government, the share of sugar diverted for ethanol production fell from around 12% in 2022-23 to around 9% in 2025-26. It also said nearly three-fourths of the ethanol produced in the country now comes from grains, particularly maize.

Sugar prices have risen sharply in recent weeks, increasing from Rs.48.18 per kg on July 20, 2026, to Rs.55.70 per kg on August 20, 2026.

"The present increase in suga...