Sugar Prices Expected to Remain Firm

05-May-2026 08:28 PM

New Delhi. Sugar prices are currently displaying strength—driven by a free-sale quota for May that fell short of expectations and the likelihood of increased industrial consumption—and this trend is expected to persist in the coming days. The industry and trade sectors had projected a free-sale quota of 23.00–23.50 lakh tonnes for domestic sales in May; however, the actual quota announced was a mere 22.50 lakh tonnes. This quota figure came as a surprise, given that May typically witnesses a customary rise in sugar demand and consumption.

According to market experts, domestic sugar production during the 2025–26 season failed to rise in line with expectations; consequently, millers do not hold such a massive stock that it would feel like an excessive burden. The government had initially authorized the export of 15 lakh tonnes of sugar, a limit which was subsequently raised by an additional 5 lakh tonnes. This move is also expected to exert a certain degree of psychological influence on the market.

It has now become virtually clear that domestic sugar production during the current marketing season will not exceed the 280 lakh-tonne mark. The main sugarcane crushing season has already concluded, although a special crushing season is scheduled to take place in Tamil Nadu and Karnataka during July and August. Combining the output from both seasons, the aggregate sugar production is projected to reach approximately 78–79 lakh tonnes.

The outlook for the upcoming season also does not appear particularly encouraging; due to the influence of El Niño, the Southwest Monsoon is expected to remain weak, potentially leading to irregular and unpredictable rainfall—a scenario that raises concerns regarding adverse effects on the sugarcane crop. This could, in turn, result in a decline in sugar production.