Industry Odisha Bureau, Oct 14: Sugar inflation hit 29.8% in September, pushing up prices of festive sweets and candy. Higher oil, fuel and dry-fruit costs add pressure. Relief depends on the upcoming sugarcane crushing season.
Sugar inflation jumped to 29.8% year-on-year in September, up from 24.3% in August. The surge is making festival sweets and confectionery costlier across India. For many households, the bitter truth is a bigger festive budget.
Data from the Ministry of Statistics and Programme Implementation show the pressure spreading. Sugar is a core input for sweets, desserts and candy. Higher sugar prices therefore ripple quickly through the confectionery industry.
Inflation in the sugar, confectionery and desserts category reached 13.8% in September. It stood at 10.9% in August and just 3.4% in January. This broader category covers more than sugar alone, so rises vary by product.
Prepared sweets, excluding milk-based varieties, saw inflation climb to 9.4% from 7.3%. Candy inflation nearly doubled, rising to 11.5% from 6%. Ready-made food inflation edged up to 10% from 9.6%. Namkeen inflation rose more gently, to 3.4% from 3%.
Sugar is not the only cost rising for manufacturers. Edible oil and fuel have also become more expensive, said Devendra Pant. Pant is chief economist at India Ratings and Research. Cashew nut prices rose 4% year-on-year, while raisins and munakka recorded 10.4% inflation.
When several ingredients rise together, production costs climb across entire product ranges. Poonam Upadhyay, director at Crisil Ratings, linked confectionery inflation to higher input costs. She said festive demand was adding further pressure.
The festival calendar intensifies in October with Navratri, Durga Puja and Dussehra. Demand typically peaks around Diwali, lifting sales of sweets, snacks and gifts. Upadhyay said tradition and culture should keep festive demand supported.
Still, she warned consumers may turn more value-conscious if prices stay high. Some may buy smaller quantities or switch to cheaper options. Such shifts remain possible responses, not confirmed trends.
The price rise also has roots in the farm sector. Pant linked higher sugar prices to lower production, monsoon-related factors and strong demand. Sugar output depends heavily on sugarcane yields, which rely on adequate rainfall.
Uneven rainfall has raised concerns about cane yields this season. Weaker yields could tighten supplies further, though losses are not yet confirmed. Strong demand during a supply squeeze tends to amplify price pressure.
The pressure is visible in wider inflation data too. Food inflation rose to 7.7% in September from 6% in August. Headline retail inflation climbed to 5.54% from 4.8%.
Sugar is only one of several factors behind these increases. Pant said higher food inflation could weigh on consumer demand. Rising food bills can leave households less room for discretionary spending.
Relief may come with the upcoming sugarcane crushing season. Fresh output could improve availability, Upadhyay said. However, the timing and scale of any easing depend on actual sugar production. Supplies must also reach markets quickly to affect prices.
Manufacturers, meanwhile, face a balancing act. Upadhyay expects them to pursue operational efficiencies and calibrated pricing. Steep price hikes could risk hurting festive demand.
For now, sugar prices hinge on cane yields and fresh supplies. Until supplies improve, festival budgets may remain under strain.
