India may need to import sugar again next year as lower rainfall and water shortages in major sugar-producing states raise concerns over cane yields and sugar recovery. Industry sources indicate that sugar imports could begin from July next year after the current import quota expires, with volumes potentially reaching 2 million to 3 million tonnes if sugar production declines further in the 2027-28 season.
Maharashtra, Karnataka and Tamil Nadu are among the major sugarcane-producing states facing concerns over inadequate rainfall and water availability. Lower water availability could affect sugarcane yields as well as the average recovery of sugar from cane, potentially reducing overall sugar production. Maharashtra is India's largest sugar-producing state, while Karnataka is among the country's leading producers of both sugarcane and sugar. 
India is the world's second-largest sugar producer after Brazil. After maintaining surplus sugar production for several years, domestic output fell below consumption requirements in the 2024-25 season. A similar situation has emerged in the 2025-26 marketing season, which runs from October to September. Rising domestic sugar prices had prompted the government to allow duty-free imports of 1 million tonnes of raw sugar under the Tariff Rate Quota (TRQ) system to improve domestic availability.
Water Shortage Raises Concerns for Sugar Production
Trade analysts expect India's closing sugar stocks at the end of the 2025-26 marketing season to fall to one of the lowest levels in several years. If sugar production in the 2026-27 season remains below domestic consumption and demand, the requirement for imports could increase further.
Sugar production is highly dependent on adequate water availability, making rainfall conditions particularly important in Maharashtra and Karnataka. A prolonged shortage of water could reduce cane productivity and sugar recovery, putting additional pressure on domestic supplies.
El Nino Risk Could Affect India's Sugar Output
Sugar production in India could face further pressure in the 2026-27 season if dry weather conditions associated with El Nino affect sugarcane crops. Lower cane yields and reduced sugar recovery could result in weaker sugar production in the next season. 
According to a Bloomberg survey, India's gross sugar production in the season ending September 2027 is estimated to remain in the range of 29 million to 31 million tonnes. A further decline in production could increase the possibility of imports to meet domestic requirements and rebuild stocks.
India Could Import 2-3 Million Tonnes of Sugar
Industry officials said that a further decline in cane quality and sugar recovery could push domestic production below consumption requirements. In such a scenario, India may need to import sugar for another year to maintain adequate supplies and replenish stocks across the supply chain.
After the existing import quota expires, imports could begin from July next year. Industry estimates suggest that imports could reach 2 million to 3 million tonnes, particularly if production falls further in the 2027-28 season.
Sugar Prices Expected to Remain Under Control During Festive Season
Despite concerns over future production, sugar prices are not expected to rise significantly during the upcoming festive season. Indian Sugar & Bio-Energy Manufacturers Association (ISMA) Director General Deepak Ballani said sugar demand is likely to increase during the festive period, making it important to ensure adequate supplies at reasonable prices during Dussehra and Diwali.
According to Ballani, the government and sugar industry are committed to maintaining sufficient sugar supplies for consumers during the festive season. Retail sugar prices have already started showing a downward trend, and prices could decline further in the coming weeks.
Domestic Sugar Supply Remains Adequate
Changes in ex-mill sugar prices do not immediately translate into changes in retail prices because sugar passes through several stages of the supply chain before reaching consumers. As a result, there is generally a time lag between changes in mill-level prices and their impact on retail markets.
The sharp decline in ex-mill sugar prices is expected to gradually benefit retail consumers. Average ex-mill sugar prices across India have fallen by around 25-30% and are currently estimated at about ₹4,450 per quintal. With adequate stocks available and supply conditions remaining normal, the domestic sugar market is expected to remain sufficiently supplied during the festive season.
