Indian sugar output to fall below demand for second year
India's sugar output will likely fall below consumption for a second year as mills shut early. Lower yields are expected to reduce stocks and lift local prices.
India is facing a second consecutive year where Sugar production is expected to fall below domestic consumption levels. Lower sugarcane yields have forced processing mills to shut down earlier than anticipated, according to industry officials and trade data. This supply deficit, combined with recent export activity, is projected to tighten domestic inventories and provide upward pressure on local prices that had previously been suppressed by surplus supplies. Current estimates suggest that total production for the season will not exceed 28 million metric tons. This revised outlook falls short of domestic demand, which typically ranges between 28.5 million and 29 million tons. Early in the season, major industry bodies such as the Indian Sugar & Bio-Energy Manufacturers Association and the National Federation of Cooperative Sugar Factories Ltd (NFCSF) had projected a surplus with production reaching 31 million tons. The acceleration of mill closures highlights the severity of the yield decline caused by erratic weather patterns. According to NFCSF data, 467 of the 541 mills that began operations this year had ceased production by the end of March, a notable increase from the 420 mills closed by the same time last year. Processing facilities in Maharashtra and Karnataka, the primary sugar-producing regions, have been particularly affected by the early shutdowns. > "But now it is certain that production will not even meet domestic consumption," said a New Delhi-based dealer with a global trade house. While production in the first half of the 2025/26 marketing year reached 27.12 million tons—a 9% increase year-on-year—the rapid pace of closures suggests a sharp drop-off in output for the remainder of the cycle. The government’s decision in February to raise the export quota to 2 million tons has further tightened the domestic balance sheet. > "This should help firm up sugar prices," an official with a leading industry body stated, noting that opening stocks for the next season are expected to fall below 4 million tons, down from 5 million tons at the start of the current cycle.
