New Delhi, Aug. 22 -- The government on Friday said the recent surge in sugar prices cannot be attributed to the diversion of sugar for ethanol, pointing instead to lower-than-expected domestic production, higher festive-season demand, and weather-related crop damage. Average retail sugar prices rose from Rs.48.18 per kg on July 20 to Rs.58.20 per kg on August 21, according to data from the consumer affairs ministry's price portal. The price surge has prompted the government to step up measures to curb hoarding and allow sugar imports for the first time in nearly a decade to augment domestic availability ahead of the festive season. According to an official release, the share of sugar diverted for ethanol has declined from around 12% of production in 2022-23 to about 9% in 2025-26 as output dropped. Nearly three-fourths of ethanol produced in India now comes from grains, particularly maize, the government stated. Domestic sugar production in the current season is expected to reach around 30.6million tonnes, well below the initial estimate of 34.35 million tonnes. Output fell as crops were hit by red rot and top borer diseases in sugarcane, alongside waterlogging from excess rainfall. India has largely remained a sugar-surplus nation and a net exporter for almost the entire past decade. According to industry data, the country has already exported about 800,000 tonnes and diverted nearly 3 million tonnes for ethanol in the ongoing sugar season, which ends on September 30. Domestic consumption is estimated at about 28.5million tonnes this year. Despite the lower output, the government assured that adequate stocks remain available to meet domestic demand until the new crushing season begins in October. "Despite the lower than estimated production, adequate sugar stocks are available in the country to meet domestic demand until the new crushing season begins in October," the release stated. Defending the price surge, the government noted that global sugar markets are experiencing a similar trend. "The tightening of sugar supplies is a global phenomenon and is not limited to India. The global sugar deficit for 2026-27 is estimated at around 33 LMT [lakh metric tonnes]. Concerns over weather conditions have further affected the global outlook. As a result, international sugar prices have risen sharply from $474 per tonne on June 30, to $552 per tonne on August 20- an increase of over 16% in less than two months," it added....