India sugar production to fall below consumptio again as lower cane yields hit output in 2025/26 season
India’s sugar output is set to miss domestic demand again, tightening stocks and supporting prices as lower cane yields force early mill closures.
INDIA – India’s sugar production is set to fall below domestic consumption for a second consecutive year in the 2025/26 season, as lower cane yields force mills to shut earlier than expected, trade officials told Reuters.
The anticipated decline in output, combined with increased exports, is expected to tighten domestic stockpiles and support local sugar prices, which had previously been under pressure due to surplus supplies.
“Sugar production is unlikely to exceed 28 million metric tons this season,” said the India head of a global trade house based in Mumbai. “Most sugar mills have already closed, with only a few still operational, which are expected to close in the coming weeks.”
At the start of the season, industry bodies including the Indian Sugar & Bio-Energy Manufacturers Association (ISMA) and the National Federation of Cooperative Sugar Factories Ltd (NFCSF) had projected production of around 31 million tons, compared to domestic demand of 28.5 to 29 million tons.
However, excessive rainfall reduced cane yields, forcing 467 of the 541 mills that began operations this year to shut by the end of March, according to NFCSF data. In comparison, 420 mills had closed by the same time last year, highlighting the accelerated pace of closures.
Despite the anticipated shortfall, Indian sugar mills produced 27.12 million tons during the first half of the 2025/26 marketing year ending in September 2026, marking a 9% increase compared to the same period a year earlier.
Almost all mills in Maharashtra and Karnataka, the country’s largest and third-largest sugar-producing states, have already ceased operations earlier than usual, according to a New Delhi-based dealer with a global trade house.
“The government allowed exports hoping for a large surplus. But now it is certain that production will not even meet domestic consumption,” the dealer said.
In February, the government raised its sugar export quota to 2 million tons, adding 500,000 tons to the previously approved 1.5 million tons.
After last year’s production decline, the industry had expected this season to rebuild stocks and support exports. However, lower output is now likely to reduce carryover stocks into the next season.
“This season began with opening stocks of 5 million tons, but the next season will start with less than 4 million tons. This should help firm up sugar prices,” said an official with a leading industry body.
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