India sugar production forecast cut 14% in 2026-27
Lower ending stocks, rising domestic prices and weather-related cane losses could tighten India’s sugar supply, prompting duty-free imports and restrictions on bulk buyers.
INDIA – India’s sugar production is forecast to fall 14% to 29.5 million metric tonnes (MMT) in the 2026-27 marketing year, as erratic rainfall, prolonged dry spells, waterlogging and pest infestations reduce sugarcane yields and sugar recovery rates, according to USDA FAS.
The forecast, published on October 5, 2026, in the USDA’s Sugar Semi-annual report, is below its earlier projection of 33.6 MMT. Output is expected to comprise 27.6 MMT of crystal sugar and 62,000 tonnes of khandsari sugar.
Sugar consumption is projected at 30.83 MMT on a raw-value basis, exceeding expected production by approximately 1.33 MMT. The report said this would represent the widest supply shortfall in three years.
Field surveys conducted between March and September 2026 identified weather-related stress in major producing states, including Maharashtra, Karnataka and Uttar Pradesh. Erratic rainfall and extended dry spells affected cane development, harvested cane weight and sucrose content.
Waterlogging damaged fields in Maharashtra, while red borer infestations were reported in parts of Uttar Pradesh. Sugar recovery is forecast at 8.6%.
India’s sugarcane production is expected to decline to 434 MMT from the earlier estimate of 455 MMT, while planted area is projected at 5.9 million hectares.
The USDA also warned that strengthening El Niño conditions could worsen water shortages and disrupt milling operations in early 2027.
The lower production outlook comes amid rising domestic prices. Sugar prices increased from US$515 per tonne on July 20 to US$596 on August 20, while the all-India average retail price reached US$685 per tonne. Wholesale prices rose to US$637 per tonne.
To address supply concerns, the Indian government approved duty-free imports of 1 MMT of raw sugar under a tariff-rate quota for 2025-26, available until October 31, 2026. Bulk consumers purchasing more than 10 tonnes monthly must also limit inventories to 15 days of consumption between September 1 and November 30.
The USDA forecast India’s 2026-27 ending stocks at 4 MMT, down from its earlier estimate of 6.5 MMT. Raw sugar imports are expected to be largely limited to the Advance Authorisation Scheme, which requires imported sugar to be processed and re-exported.
Total imports are projected at 2.43 MMT, comprising 2.4 MMT of raw sugar and 30,000 tonnes of refined sugar. Exports are forecast at 3.1 MMT, including quota-based shipments to the United States and European Union.
Ethanol production will continue competing for sugarcane supplies. India diverted an estimated 3 MMT of sugar to ethanol in 2025-26 after achieving its 20% ethanol-blending target.
Meanwhile, the government raised the sugarcane Fair and Remunerative Price to Rs3,650 per tonne from October 1, 2026.
The USDA also reported that mills owed farmers Rs 1,12,740 crore (US$ in 2025-26 cane payments. By August 20, 97% had been cleared, leaving approximately US$360 million unpaid.
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