The Indian Food Ministry has projected the country’s gross sugar production for the current season, which began on October 1, to be 34 million tonnes (mt). This estimate is lower than the nearly 35 mt forecasted by the Indian Sugar and Bio-energy Manufacturers Association (ISMA). The government is approaching export permits cautiously due to several factors including lower-than-expected production, increased sugarcane diversion towards ethanol, concerns about the upcoming sugarcane crop, and a delayed start for sugar factories.
According to an official source, “There is no hurry, and sugar prices are stable despite Dussehra and Diwali being celebrated in the same month.” The source emphasized the need for caution regarding production estimates for October to December, citing fears about potential declines in sugarcane yield and recovery rates in certain states. The official indicated that the net sugar output might be around 30 mt.
In terms of USDA projections, although this year’s gross production will surpass last year’s figure of 29.5 mt, the closing stock on September 30 was recorded at 4.9 mt, a decrease from 7.9 mt the previous year. If sucrose diversion to ethanol rises to 4 mt this year, up from 3.5 mt last season, the projected net sugar production for 2025-26 could be 30 mt, compared to an estimated 26 mt for 2024-25. India’s annual sugar consumption stands at approximately 28.5 mt.
Conversely, the USDA anticipates a more than 25 percent increase in India’s sugar output, projecting it to reach 35.3 mt in 2025-26, up from 28 mt in the previous season, attributed to favorable weather conditions and an expansion in area under cultivation. The Food Ministry is currently awaiting an updated sugarcane production estimate from the Agriculture Ministry, expected to be released in early November.
An industry expert supported the government’s cautious stance, stating, “The government would not like to take another risk next year as closing stock dropped to below 5 mt, and more diversion to ethanol is expected.” The expert deemed any decision on exports as premature, stressing the importance of monitoring crop conditions over the next three to four months due to weather and pest concerns. Should government estimates hold true, the exportable surplus could reach a maximum of 1.5 mt.
Concerns regarding production levels had initially been tied to an increase in sugarcane acreage in Maharashtra and Karnataka, intended to offset a decline in Uttar Pradesh. However, heavy rainfall has led to waterlogging in Maharashtra, potentially impacting approximately 10 mt of sugarcane, prompting the Maharashtra State Cooperative Sugar Mills Association to adjust its yield estimates from 82 tonnes per hectare to 74 tonnes per hectare.
Despite these setbacks, millers anticipate that about 120 mt of sugarcane will be available for crushing this year, a rise from 85 mt last year. While the government had recommended an early October commencement for factories due to expected higher output, many mills are now set to begin crushing operations in November.
Claudiu Covrig of Covrig Analytics remarked that the Indian government might permit only 1.8 mt to 2 mt of sugar for export, with a decision expected between December and February, effectively locking a global sugar surplus within India.
Published on October 13, 2025.
