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India's Sugar Sector Faces a Testing 2026-27 Season
India makes and uses a lot of sugar.
Its next sugar-making season begins in October 2026.
The industry has less sugar stored than usual, while weather problems may reduce the next crop.
Heavy rain, plant diseases and pests already lowered sugar production this season.
The government stopped exports and allowed some sugar imports to help supplies.
It may also send less sugarcane toward ethanol, leaving more cane for sugar.
Sugar prices rose sharply but later fell after government measures.
Mills, farmers and consumers are waiting for the monsoon and a decision about ethanol production.
India’s sugar sector enters the October 2026-27 crushing season with low stocks, weather risks and an export ban.
Gross sugar output in 2025-26 is estimated at about 310 lakh tonnes, below initial forecasts near 343 lakh tonnes.
The government allowed 10 lakh tonnes of duty-free raw sugar imports and imposed stock limits to contain prices.
Sugar diversion to ethanol may be restricted to C-heavy molasses as retail sugar prices reach record levels.
A strong El Niño, weak monsoon conditions and uncertain ethanol policy will shape the next season’s supply balance.
- Who
- India’s sugar mills, sugarcane farmers, consumers and the central government are involved.
- What
- The sugar industry is preparing for a difficult 2026-27 crushing season amid low stocks, weather risks, price pressures and possible ethanol restrictions.
- Where
- The pressures are concentrated in India, particularly Maharashtra, Karnataka and Uttar Pradesh.
- When
- The 2026-27 crushing season starts in October; the report was published on September 12, 2026.
- Why
- Weak opening stocks, crop damage, possible El Niño conditions, an export ban and expected limits on cane-based ethanol production are creating uncertainty.
Prioritize Sugar Supply
Protect Industry Economics
Ethanol feedstock
Prioritize Sugar Supply
Restricting cane-juice and B-heavy-molasses ethanol could preserve more sugar for domestic consumption while stocks and output remain tight.
Protect Industry Economics
The ethanol industry has invested in cane-based production, while grain-based feedstocks already supply about 70% of ethanol output; mills also face unchanged cane-based ethanol rates.
Early crushing
Prioritize Sugar Supply
The government supports an early October crush to bring sugar supplies to market before Diwali.
Protect Industry Economics
Millers warn that cutting cane too early can reduce recovery and may worsen the economics of processing.
Mills' financial position
Prioritize Sugar Supply
Consumers and policymakers face pressure to keep sugar prices under control after retail prices reached ₹63 per kilogram in August.
Protect Industry Economics
Mills are squeezed by a Fair and Remunerative Price of ₹365 per quintal, a minimum selling price frozen at ₹31 per kilogram since 2019, and unchanged ethanol rates.
Key facts
- Opening stocks
- About 34-36 lakh tonnes, equal to roughly six to seven weeks of consumption.
- Expected consumption
- Domestic sugar consumption is estimated at 285-290 lakh tonnes.
- 2025-26 gross output
- The Indian Sugar and Bio-energy Manufacturers Association estimates about 310 lakh tonnes, compared with initial forecasts near 343 lakh tonnes.
- Cane production
- Agriculture Ministry estimates put 2025-26 sugarcane production at a record 500 million tonnes.
- Potential 2026-27 output
- A gross production range of about 300-320 lakh tonnes is presented as a more defensible base case.
- Government measures
- Exports were banned, 10 lakh tonnes of raw sugar imports were allowed duty-free, and stock limits were imposed.
- Ethanol diversion
- About 30 lakh tonnes of sugar was diverted to ethanol in the current supply year; the next policy may allow only C-heavy molasses.
Sources
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