Consumer Goods Companies Plan Price Hikes as Sugar Costs Surge Ahead of Festive Season

Cookies, chocolates and ladoos could cost more this festive season as elevated sugar prices squeeze consumer-goods companies, prompting makers to consider price increases ahead of a key period for sales.

Sugar demand in India usually peaks during the festival season, which runs from late August through January, as consumption of traditional sweets and processed foods rises. This year, however, consumers could be paying more for their festive indulgence as rising sugar and milk costs put pressure on manufacturers and mithai makers. A report by Equirus Securities has said that sugar prices were up 19% year-on-year and 20% from the previous quarter, raising the cost burden for categories such as biscuits, confectionery, malted beverages and carbonated drinks.

While sugar prices have eased following recent government measures, including allowing imports and tightening stockholding norms for bulk users and dealers, they remain significantly higher than a month ago. The average all-India retail price fell 3.85% in a week to Rs 62.57 per kg from Rs 65.08 per kg, according to official data, but is still 27% above the previous month’s level of Rs 49.33 per kg.

Price pain ahead of festive season

For brands with a core presence in sugar-heavy categories such as beverages, biscuits and confectionery, the quantum of hikes could be large.

Bikaji Foods is already in the process of rolling out about a 2% price increase across its sweets portfolio, CFO Rishabh Jain told TOI. Even though the steps taken by the government have helped in checking price rise to an extent, the cost of procuring sugar is still higher by around 20% compared to the last couple of months, Jain said.

“There is a considerable difference between what we had initially estimated (cost of sourcing sugar) and the current cost scenario. Companies have no option but to pass on price increases to consumers. Ultimately, the lower price points will get affected because grammage will have to be cut and value realisation will come down,” a senior executive at a large packaged foods company told TOI.

The pressure is also being felt by mithai makers, who are facing higher costs of both milk and sugar ahead of Ganeshotsav. Milk prices have increased by around 16% in the last four months, while sugar, which was earlier priced at around Rs38 per kg, is now being sold at up to Rs76 per kg in some cases, said Parmanand Sharma, founder and CEO of Mithaiwala.

The increase in input costs has already translated into higher prices for consumers. Peda, for instance, is priced at Rs 750–780 per kg, a hike from the previous Rs 550–560 per kg, Sharma said. “Prices of almost all sweets have increased by at least 30%,” he added.

The added cost pressure for companies comes at a time when they have already been hit by war-triggered commodity inflation. From Hindustan Unilever (HUL) to Marico and Dabur, firms have taken more than one round of price hikes in the range of 2-7%.

What is government doing?

The Government has observed that speculation and hoarding by some sugar mills and traders have also contributed to the recent price increase. Several steps have therefore been taken:

A stock limit of 400 tonnes has been imposed on sugar dealers across the country from August 1 to November 30, 2026.

From 1 September, bulk consumers will not be permitted to hold sugar stocks exceeding 15 days of consumption.

Joint teams of Central and State Government officials are carrying out physical verification of sugar stocks at mills to check hoarding and artificial scarcity.

As a precautionary measure, the Government has decided to permit duty-free import of 10 LMT of raw sugar to further augment domestic availability.

States and sugar mills have been advised to begin crushing from October 15, 2026. This is expected to raise October sugar production from the usual 3-4 LMT to more than 10 LMT, further improving availability during the festive season.

In a press statement, the Centre said that it will continue to closely monitor sugar stocks, prices and market practices and take all necessary measures to prevent hoarding and unwarranted price increases while ensuring timely payment of dues to farmers.