India Likely to Need Sugar Imports Next Year Too

Mumbai: Sugar production is likely to be impacted by deficient monsoon rainfall in leading sugarcane-producing states like Maharashtra, Karnataka, and Tamil Nadu, potentially forcing India to import sugar for the second consecutive year. Severe water shortages in these key producing states are expected to reduce both the average sugarcane yield and the average sugar recovery rate from the cane.

It is worth noting that India is the world's second-largest sugar producer after Brazil. After nearly a decade of surplus production, output fell short of domestic requirements in the 2024-25 season, and the situation persisted into the 2025-26 marketing season (October-September). Consequently, as market prices surged to all-time highs, the government was compelled to permit the duty-free import of 1 million tonnes of raw sugar from abroad under the Tariff Rate Quota (TRQ) system.

According to trade analysts, the Indian industry's carry-over sugar stocks will shrink to multi-year lows by the end of the 2025-26 marketing season. If production falls short of domestic demand in the 2026-27 season—a scenario considered highly likely—the need for imports could increase.

Sugar manufacturing is water-intensive, yet conditions are deteriorating in Maharashtra and Karnataka. Karnataka is the country's third-largest producer of sugarcane and sugar; the state government there has decided to reserve water stocks for drinking purposes, while the Maharashtra government is considering a similar move. Maharashtra is regarded as the country's leading sugar-producing state.