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India Sugar Output May Fall as El Niño Threatens Harvest
India may produce less sugar in the 2026-27 season.
A weather pattern called El Niño could bring drier conditions and hurt sugar crops.
India’s monsoon rainfall is currently about 15% below normal.
Experts surveyed by Bloomberg expect production of 29 million to 31 million tonnes.
That would be lower than the 31 million tonnes expected this season.
Less sugar could make supplies tighter and prices higher.
The government has allowed mills to import raw sugar without duties.
Some analysts think India may need to import 2 million to 3 million tonnes next year to rebuild stocks.
Other market participants are less certain about how much sugar will be diverted to ethanol.
A Bloomberg survey forecasts India’s 2026-27 sugar output at 29 million to 31 million tonnes.
The estimate is below the 31 million tonnes expected in the current season.
El Niño-related dry weather and monsoon rainfall about 15% below normal threaten sugar crops.
India has approved duty-free raw sugar imports and imposed stockholding limits to manage domestic prices.
Some market participants expect India to import 2 million to 3 million tonnes next year as inventories tighten.
- Who
- India, sugar mills, traders, analysts, and government officials are involved.
- What
- India’s sugar production is projected to decline in 2026-27, potentially increasing the need for imports.
- Where
- India and global sugar markets, including New York raw sugar futures.
- When
- The forecast concerns the season ending in September 2027; imports could begin as early as July next year if quotas are exhausted.
- Why
- El Niño-related dry weather and below-normal monsoon rainfall could reduce the sugar harvest and tighten domestic stocks.
Import Concern
More Optimistic Outlook
Need for imports
Import Concern
Some analysts and traders expect India to import sugar for a second consecutive year, with possible purchases of 2 million to 3 million tonnes to rebuild stocks.
More Optimistic Outlook
Other market participants do not expect imports to be necessary or are less certain that stocks will tighten enough to require them.
Sugar versus ethanol
Import Concern
Some market participants expect no diversion of sugar toward ethanol, leaving production and supply vulnerable to weather-related declines.
More Optimistic Outlook
Current domestic sugar prices may encourage mills to produce more sugar rather than ethanol, potentially supporting available supplies.
Production outlook
Import Concern
El Niño and below-normal rainfall could reduce output to as little as 29 million tonnes and contribute to tighter supplies.
More Optimistic Outlook
The survey’s upper estimate of 31 million tonnes matches the expected current-season production, indicating that a larger decline is not certain.
Key facts
- Projected 2026-27 output
- 29 million to 31 million tonnes
- Expected current-season output
- 31 million tonnes
- Rainfall status
- Monsoon rainfall is about 15% below normal
- Global sugar deficit forecast
- Around 260,000 tonnes
- Raw sugar price movement
- New York futures have risen nearly 30% this year
- Possible import volume
- 2 million to 3 million tonnes
- Government measures
- Duty-free raw sugar imports and stockholding limits
Quotes
Yatin Wadhwana
Director at commodity trading and advisory firm Gradient Commercial Pvt.
“The country may need to import sugar next year to build up its closing stocks. Current domestic sugar prices are likely to encourage mills to produce more sugar rather than ethanol.”
freepressjournal.in
Sources
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