News Capsule: India's sugar market faces tightening supply despite stable cane acreage
09-Jun-2026 11:05 AM
News Capsule: India's sugar market faces tightening supply despite stable cane acreage
★ India's sugarcane area for the 2026-27 season is expected to remain largely unchanged at around 5.85 million hectares. As of early June, sowing stood at 5.41 million hectares, slightly below last year's 5.43 million hectares.
★ Uttar Pradesh, the country's largest sugarcane-producing State, has maintained its acreage at 2.8 million hectares. Maharashtra has recorded a marginal increase to 1.18 million hectares, while Karnataka's area has slipped to 0.43 million hectares.
★ Sugarcane productivity in eastern and central Uttar Pradesh, as well as Bihar, remains highly dependent on monsoon performance, making the crop vulnerable to a potential El Niño-driven rainfall deficit.
★ Domestic sugar consumption during the 2025-26 season is estimated at 28.5-29 million tonnes, while net sugar production is expected to remain below 28 million tonnes. As a result, opening sugar stocks on September 30, 2026, could fall to 3.5-3.9 million tonnes, significantly lower than last year's 4.9 million tonnes.
★ With inventories tightening, the government is likely to prioritise domestic availability, limiting the scope for additional sugar exports and sugar diversion for ethanol production. Industry estimates suggest ethanol diversion could remain below 3 million tonnes of sugar equivalent next season.
★ Although overall cane acreage remains stable, lower carry-over stocks, strong domestic demand and the risk of an El Niño year could leave India's sugar balance sheet extremely tight in 2026-27. If this situation persists, sugar prices may face upward pressure in the coming months.