Sugar Production and Use Expected to Stabilize

26-Nov-2025 01:57 PM

New Delhi. Domestic sugar production is expected to increase significantly this year compared to the previous season, while sugar use is expected to remain roughly stable.

The government has increased the sugar export quota by 500,000 tons, although its use for ethanol production will be limited.

Overall, there is a good balance between sugar demand and supply this year, and prices may remain fairly stable.

If the ex-factory minimum selling price (MSP) of sugar is significantly increased and the price of ethanol is raised, the industry could receive significant relief.

During the current marketing season (October-September) of 2025-26, gross national sugar production is estimated to be between 340-345 lakh tons, of which 36-37 lakh tons could be used for ethanol production.

The government has increased the sugar export quota from 1 million tonnes for the 2024-25 season to 1.5 million tonnes for the 2025-26 season, but given the state of the international market, shipment of this entire quota is doubtful.

In the last marketing season, actual sugar exports fell short of even 800,000 tonnes against the 1 million tonnes target.

While the industry has attributed this to the delay in announcing export quotas, this is not the only reason. Sugar was available at relatively low prices in the international market, while Indian millers were reluctant to reduce its prices,

as domestic prices are expected to remain somewhat higher due to improved production in top exporting countries like Brazil and Thailand. Overall, the sugar balance sheet will remain balanced this time, and the industry's financial situation may improve somewhat.