Updated: February 3, 2026
India’s sugar stock levels fell by 11% year-on-year to 74.49 lakh tonnes as of January 31, even though sugar production rose sharply this season. A year ago, stocks stood at 84.61 lakh tonnes.
This decline has come despite 17% higher sugar production and 4% lower consumption during the October–January period of the current sugar season.
Mills under cash pressure
Industry experts warn that sugar mills may face serious cash flow problems, as earnings from both sugar sales and ethanol are unlikely to improve.
“There has been 20 lakh tonnes less sugarcane crushing in Uttar Pradesh this year, and recovery rates are still below 10%. Sugar output in the state also fell by about 3% in January, which is usually the peak crushing period,” said an industry expert. He added that Uttar Pradesh could face a production shock this season, though it may be smaller than what Maharashtra experienced last year.
Lower opening stock a key reason
The expert explained that the season began with an opening stock of under 50 lakh tonnes, compared with nearly 80 lakh tonnes last year. While the 30-lakh-tonne gap is significant, he noted that an opening stock of 65–70 lakh tonnes is generally adequate, and the entire gap does not need to be filled.
No MSP hike, limited export relief
The government has not agreed to raise the minimum selling price (MSP) of sugar, nor has it allowed additional ethanol production from sugarcane-based feedstock.
So far, the only relief for the industry has been permission to export 15 lakh tonnes of sugar by September 30, up from 10 lakh tonnes allowed in the 2024–25 season.
Domestic sales expected to fall
According to Food Ministry data, domestic sugar sales under the government’s quota system are expected to decline by 3.5% to 110.5 lakh tonnes between October 2025 and February 2026, compared with 114.5 lakh tonnes in the same period last year.
Institutional demand to lead consumption
A study titled “Sugar Consumption in India”, commissioned by the Indian Sugar & Bio-Energy Manufacturers Association (ISMA) and released in September 2025, projects sugar consumption to grow at 1.5–2% annually from 2024–25 to 2029–30.
The growth will mainly come from institutional buyers, while retail consumption is expected to remain largely flat due to rising health awareness and diabetes concerns. Among institutional users, demand from beverages is expected to grow moderately, while ice cream and confectionery consumption is likely to rise faster.
Production rises sharply across major states
India’s total sugar production for the 2025–26 season reached 193.05 lakh tonnes as of January 31, up from 165.3 lakh tonnes a year earlier.
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Maharashtra produced 78.95 lakh tonnes, up 42.3% from 55.5 lakh tonnes
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Uttar Pradesh produced 55.1 lakh tonnes, up 4.6%
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Karnataka produced 36.6 lakh tonnes, up 10.6%
These figures are based on data from the National Federation of Cooperative Sugar Factories (NFCSF).
However, industry data also show that Uttar Pradesh’s sugar output fell 3.2% in January to 19.45 lakh tonnes, compared with 20.1 lakh tonnes in January 2025.
Millers blame the decline on lower sugarcane crushing, which dropped to 559.39 lakh tonnes during October–January, from 579.12 lakh tonnes last year. They say this was due to late mill operations and more cane being diverted to gur and jaggery units. Farmers, meanwhile, point to lower crop yields as the main reason.
