Sugar Prices Remain Stable Due to Demand-Supply Balance

07-Jan-2026 08:52 PM

Pune: Due to a better balance between demand and supply in the domestic market, sugar prices have remained relatively stable within a limited range, and a sharp increase is not expected in the near future.

A ​​monthly quota of 2.2 million tonnes of sugar for domestic sale has been released for January 2026, similar to December 2025, which is considered sufficient to meet demand and requirements. Severe cold weather in North India has significantly reduced the use of sugar, especially in the production of cold drinks and ice cream.

Sugar prices are primarily supported by industrial demand. Currently, there is some demand for sugar in North India for Makar Sankranti and in the southern states for the Pongal festival. The wedding season will begin after Makar Sankranti, which may lead to some improvement in sugar demand.

Strong sugarcane crushing is leading to a good increase in sugar production, and mills are accumulating stocks. Although the government has approved the export of 1.5 million tonnes of sugar for the 2025-26 marketing season (October-September), the pace of shipments is slow.

So far, export contracts for 1.00-1.25 lakh tonnes of sugar have been signed, of which 50-60 thousand tonnes have already been shipped.

International sugar prices have remained soft so far, but some increase is expected now as the production season is ending in Brazil, the leading producer and exporter, which will slow down sugar exports from there. This could create new opportunities for Indian exporters.

Sugar production is increasing in top producing states like Maharashtra, Uttar Pradesh, Karnataka, and Gujarat.

This year, an estimated 34-35 lakh tonnes of sugarcane components (mainly molasses), equivalent to that amount of sugar, are expected to be used for ethanol production.

This will limit millers' income, and they will have to ensure regular sugar sales to guarantee timely payment of dues to sugarcane farmers.