India sugar output seen falling to 29-31M tons in 2026-27 season
El Niño and below-normal monsoon rainfall are expected to reduce India’s sugar production, while rising prices could encourage mills to prioritise sugar over ethanol.
INDIA – India’s sugar production is expected to decline in the 2026-27 season as El Niño-induced dryness threatens the harvest, potentially tightening supplies in the world’s second-largest sugar producer.
Gross sugar production is forecast at between 29 million and 31 million tonnes in the year through September 2027, according to estimates from 11 traders, analysts and millers surveyed by Bloomberg.
The forecast compares with 31 million tonnes expected for the current season by the Indian Sugar and Bio Energy Manufacturers Association.
The strengthening El Niño weather pattern is expected to affect crops across Asia, contributing to a global sugar deficit of about 260,000 tonnes, the International Sugar Organization warned in May.
India’s monsoon rainfall is currently about 15% below normal, while expectations of lower production have helped push raw-sugar futures in New York up about 30% this year.
India, the world’s largest sugar consumer, last month allowed mills and refiners to import raw sugar duty-free to ease record-high domestic prices. The government also imposed stockholding limits on dealers and bulk users.
“The country may need to import sugar next year to build up its closing stocks,” said Yatin Wadhwana, director at commodity trading and advisory firm Gradient Commercial Pvt.
“Current domestic sugar prices are likely to encourage mills to produce more sugar rather than ethanol.”
Six respondents in the Bloomberg survey said there would be no diversion of sugar into ethanol, while five said India could require imports for a second consecutive year to rebuild pipeline stockpiles.
India could begin importing sugar as early as July 2027 after the current import quota is filled, according to Claudiu Covrig, lead analyst at Covrig Analytics. He expects inbound shipments could reach 2 million to 3 million tonnes, while production may decline further in the 2027-28 season.
The government is also monitoring domestic supplies as festival-season demand increases.
Authorities have urged sugar mills to maintain reasonable prices and ensure adequate supplies during this year’s festival season, Ashwini Srivastava, joint secretary for sugar at the food ministry, said Thursday.
Srivastava said authorities would closely monitor sugar prices and begin tracking production monthly.
The move is intended to improve supply forecasts and support government policy decisions as India manages domestic sugar availability and potential import requirements.
Sign up HERE to receive our email newsletters with the latest news and insights from Africa and around the world, and follow us on our WhatsApp channel for updates.
