India’s sugar production is expected to remain below domestic consumption for the second year in a row, mainly due to lower sugarcane yields and early closure of sugar mills, according to trade officials.
Industry estimates suggest that sugar production in the current 2025–26 marketing season (ending in September 2026) is unlikely to exceed 28 million tonnes. With domestic consumption estimated at around 28.5–29 million tonnes, the country may face a supply gap.
Lower output combined with rising exports is expected to reduce domestic sugar stocks and support local prices, which had earlier been under pressure due to surplus supply.
At the beginning of the season, industry organizations such as the Indian Sugar & Bio-Energy Manufacturers Association (ISMA) and the National Federation of Cooperative Sugar Factories Ltd (NFCSF) had projected sugar production of around 31 million tonnes, comfortably above domestic demand.
However, excessive rainfall affected sugarcane yields in several regions. As a result, 467 out of the 541 sugar mills that started crushing this season had already closed by the end of March, according to NFCSF data. During the same period last year, 420 mills had shut operations.
Despite the production challenges, India produced 27.12 million tonnes of sugar in the first half of the 2025–26 marketing year, about 9% higher than the same period last year.
Most sugar mills in Maharashtra and Karnataka, the country’s largest and third-largest sugar-producing states, have already ended crushing earlier than expected.
Initially, the government allowed sugar exports expecting a large surplus. In February 2026, the export quota was increased to 2 million tonnes, adding 500,000 tonnes to the earlier approved 1.5 million tonnes.
However, with production now expected to fall short of consumption, industry experts believe that sugar supplies will tighten and carryover stocks will decline. The current season began with opening stocks of about 5 million tonnes, but the next season is likely to start with less than 4 million tonnes.
This reduction in stock levels is expected to support domestic sugar prices in the coming months as the market shifts from surplus to tighter supply conditions.
