At the end of the current sugar season (2025-26), on September 30, 2026, the country’s sugar stock is expected to be 4.1 million tonnes, the lowest in nine years. According to the National Federation of Cooperative Sugar Factories (NFCSF), sugar production in the current season is estimated at 28.1 million tonnes. With domestic consumption of around 28 million tonnes and exports of 1 million tonnes, stocks are likely to decline to 4.1 million tonnes. The opening stock at the start of the season in October 2025 was 5 million tonnes.
At the beginning of the season, the industry had projected sugar production at around 34.9 million tonnes, with 3.4 million tonnes expected to be diverted for ethanol. However, the latest estimates peg production at 28.1 million tonnes, with 2.8 million tonnes diverted for ethanol. Thus, total sugar output is estimated at 30.9 million tonnes, nearly 4 million tonnes lower than initial projections.
Harshvardhan Patil, Chairman of the National Federation of Cooperative Sugar Factories Limited, told RuralVoice that both the sugar industry and farmers are distressed due to delays in government policy decisions. If this situation persists, the country could face a sugar availability crisis in the coming years, as farmers may lose interest in sugarcane cultivation due to declining profitability. Explaining the drop in production despite expectations of a good harvest, he said heavy rains and prolonged cloudy conditions in October deprived crops of sunlight for nearly a month, while waterlogging in fields adversely affected yields. He added that although sugar availability remains adequate, prices have not shown any significant increase.
He further noted that in 2019, the government raised the minimum selling price (MSP) of sugar from Rs 29 per kg to Rs 31 per kg. Since then, the Fair and Remunerative Price (FRP) of sugarcane has increased by Rs 650 per tonne. Meanwhile, prices of ethanol derived from sugar have remained unchanged over the past three years, adding to the financial stress on mills.
At the start of the season, ex-factory sugar prices had reached Rs 3,980 per quintal but later declined to Rs 3,715 per quintal. In January 2026, prices ranged between Rs 3,850 and Rs 3,875 per quintal. In Maharashtra and Karnataka, S-grade sugar is priced between Rs 3,700 and Rs 3,760 per quintal, while in Uttar Pradesh and Gujarat, M-grade sugar ranges from Rs 3,900 to Rs 4,095 per quintal. However, with an average production cost of Rs 4,100 per quintal, mills are incurring losses of about Rs 250 per quintal, leading to financial strain. Patil has urged the government to raise the MSP of sugar to Rs 41 per kg and increase ethanol prices.
The government has allowed exports of 2 million tonnes of sugar. Patil said that about 250,000 tonnes have been exported so far, while another 250,000 tonnes remain stuck in transit due to the Iran conflict. So far, export deals have been concluded for 750,000 tonnes. It is expected that total exports may reach around 1 million tonnes by September 30, 2026. However, global conditions could turn favourable for India, as Brazil—the world’s largest exporter—has decided to increase ethanol production instead of sugar, potentially tightening global supply and pushing up prices.
Despite lower production and declining stocks, the lack of price increase remains a major concern for both industry and farmers. In recent years, private estimates have placed annual sugar consumption between 28.5 and 29 million tonnes. If consumption rises further and exports reach 1 million tonnes, carryover stocks could fall below 4 million tonnes by early October 2026. Typically, the government aims to maintain a buffer equivalent to three months of domestic consumption.