India’s sugar production for the current 2025 to 26 sugar season is now estimated at around 306 lakh metric tonnes. The revised projection is approximately 10.79 percent lower than the initial estimate of 343 lakh metric tonnes provided by sugarcane producing states.
The government attributed the reduction mainly to crop diseases and excessive rainfall. Sugarcane affected by red rot and top borer disease has contributed to lower output, while waterlogging caused by heavy rainfall has also affected crop productivity in several growing areas.
The revised production estimate comes at a time when domestic sugar prices have increased significantly. According to government information, retail sugar prices increased from Rs 48.18 per kilogram on July 20, 2026, to Rs 55.70 per kilogram on August 20, 2026.
The government has rejected suggestions that the recent increase in sugar prices is primarily the result of sugar being diverted towards ethanol production. According to the government, the proportion of sugar diverted for ethanol production has actually declined from around 12 percent in the 2022 to 23 season to approximately 9 percent in 2025 to 26.
The government also pointed out that the composition of ethanol production has changed considerably. Nearly three fourths of the country’s ethanol production is now coming from grains, particularly maize.
Officials have identified several factors behind the recent increase in sugar prices. These include lower than expected domestic production, stronger demand ahead of the festive season, weather related crop damage, tighter global supplies and concerns over excessive stockholding.
Despite the reduction in production, the government has said that domestic sugar stocks are adequate to meet consumption requirements until the next crushing season begins in October. This is expected to provide some relief amid concerns about supply availability.
The government has also taken steps to prevent excessive stockholding and artificial shortages. A stock limit of 400 tonnes has been imposed on sugar dealers across the country from August 1 to November 30, 2026. From September 1, bulk consumers will also be restricted from holding sugar stocks exceeding 15 days of their consumption requirement.
Government teams are conducting physical verification of sugar stocks held by mills. The inspections are intended to identify excessive stockholding and discourage practices that could contribute to artificial scarcity in the domestic market.
Another major measure announced by the government is the decision to permit duty free imports of 10 lakh metric tonnes of raw sugar. The move is aimed at increasing domestic availability and reducing pressure on prices.
The government has also advised states and sugar mills to begin the next crushing season from October 15. An earlier start to crushing is expected to increase sugar production during October and improve supplies during the festive period.
The government expects October production to exceed 10 lakh metric tonnes under the earlier start scenario, compared with the usual production of around 3 to 4 lakh metric tonnes during the month.
The development is also important for sugarcane farmers. According to government data, around 97 percent of sugarcane dues for the 2025 to 26 season had been paid to farmers as of August 20. The government has argued that the ethanol programme and improved financial conditions of sugar mills have helped strengthen their ability to make timely payments.
India generally produces significantly more sugar than its annual domestic consumption requirements. In years of surplus production, large inventories can tie up working capital for sugar mills and create difficulties in making timely payments to farmers.
The government has therefore defended the use of surplus sugar and sugar based feedstock for ethanol production as part of a broader strategy to manage excess inventories and strengthen the financial position of sugar mills.
The latest production estimate nevertheless highlights the impact that weather conditions and crop diseases can have on India's sugar industry. Excess rainfall and waterlogging can affect sugarcane yields, while diseases such as red rot and top borer can further reduce production.
Global market conditions are also adding to uncertainty. The government estimates that the global sugar market could face a deficit of around 33 lakh metric tonnes during 2026 to 27. International sugar prices have also increased sharply in recent months amid concerns over weather conditions and global supply.
India’s lower than initially expected production could therefore have implications for domestic prices as well as export availability. However, the government is currently focusing on ensuring sufficient domestic supplies and preventing unreasonable price increases.
The combination of duty free imports, stock limits, physical verification of inventories and an earlier start to the next crushing season is intended to improve availability in the domestic market.
For consumers, the immediate focus will remain on sugar prices and availability during the upcoming festive season. For sugar mills and farmers, the key issue will be maintaining production and ensuring timely payments.
The government has said it will continue monitoring sugar stocks, prices and market practices. The revised production estimate of 306 lakh metric tonnes represents a significant reduction from the original projection, but authorities maintain that current stocks and the measures announced should help meet domestic requirements until the next crushing season begins.