Sugar Prices Likely to Remain Firm Amid Concerns Over Declining Production

New Delhi. Industry and trade analysts suggest that domestic sugar production may decline during the current 2026-27 marketing season (October–September), compounded by already low carry-over stocks. This is expected to create a complex supply and availability situation, likely keeping sugar prices firm.

According to a leading analyst, sugar production is projected to fall short of domestic demand for the third consecutive season. Severe drought in major producing states like Maharashtra and Karnataka has impacted the sugarcane crop, making a decline in sugar output highly probable. Furthermore, there is uncertainty regarding whether sugarcane and sugar production will show any significant improvement in the 2027-28 season. This could have a psychological impact on the domestic market.

Analysts estimate that domestic sugar production in the 2026-27 marketing season (October–September) could drop by 15% compared to 2025-26, falling to 27 million tonnes—a volume insufficient to meet domestic demand. The El Niño weather pattern has led to reduced monsoon rainfall, while severe drought conditions in Maharashtra and northern Karnataka are expected to have a deeply adverse effect on sugar production. In contrast, Uttar Pradesh has fared relatively better, benefiting from robust irrigation infrastructure, including canals and tubewells.

Most domestic analysts project domestic sugar production for the 2026-27 season to fall between 27 million and 29 million tonnes, while international observers estimate a range of 28.4 million to 29.5 million tonnes. The situation is particularly dire in Maharashtra, the country’s leading sugar-producing state.