India's Sugar Sector Remains Resilient Amid Global Price Declines

Synopsis

In a recent report, India’s sugar industry displays resilience with stable domestic demand and supply dynamics, despite significant drops in global sugar prices due to Brazilian oversupply. Discover the key insights and projections for the future of India's sugar market.

Key Takeaways

Stable Outlook: India’s sugar sector exhibits resilience amid global price drops.

Production Increase: Expected gross sugar production to rise by 9.4% in SY2026.

Price Declines: Raw and white sugar prices have significantly decreased.

Domestic Consumption: Estimated at 28.3 million metric tonnes.

Profitability Factors: Strong cane availability supports profitability.

New Delhi, March 13 (NationPress) The prospects for India's sugar industry appear stable, supported by healthy domestic demand and supply conditions, even as global sugar prices have seen a significant drop due to an excess in supply from Brazil, according to a report released on Friday.

The report from ICRA indicates that international sugar prices for the 2026 sugar year have fallen below both current production costs and domestic price levels, primarily due to increased global output.

For the sugar year 2025–26, global sugar production is estimated at approximately 189.3 million metric tonnes, reflecting a rise of about 5 percent from the previous year, while consumption is anticipated to reach 178.1 million metric tonnes, which is about 1 percent higher year-on-year (YoY).

Additionally, raw sugar prices dropped to $313 per metric tonne in February 2026, down from $445 per metric tonne in February 2025, as noted in the report.

The price of white sugar also decreased to $408 per metric tonne, falling from $532 per metric tonne in the same timeframe.

The premium for white sugar over raw sugar was recorded at $95 per metric tonne in February 2026, compared to $87 per metric tonne a year prior.

According to the third advance estimates from the Indian Sugar Mills Association, total sugar production for SY2026 is expected to increase by 9.4 percent to 32.41 million metric tonnes, compared to 29.6 million metric tonnes last year.

After directing around 3.1 million metric tonnes of sugar towards ethanol production, net sugar output is projected to be approximately 29.3 million metric tonnes.

Domestic consumption is estimated at 28.3 million metric tonnes, with exports at 0.7 million metric tonnes, leading to closing sugar stocks expected to hit 5.6 million metric tonnes, equating to roughly two months' worth of consumption.

ICRA forecasts that the operating margins for integrated sugar mills will remain stable, hovering around 10-10.5 percent in FY2026, compared to 9.6 percent in the previous year.

Profitability is likely to benefit from enhanced cane availability, robust domestic sugar prices, and steady performance from the distillery segment.

Revenue growth for integrated sugar mills is expected to remain moderate at 5–8 percent in FY2026.

However, while sugarcane prices have risen, ethanol prices have largely remained unchanged, which may keep margins relatively stable, according to the report.

Point of View

It is essential to present a balanced view on India's sugar industry. Despite the challenges posed by declining global prices, the domestic market remains robust, showcasing a healthy supply-demand balance. This resilience reflects the sector's potential for growth and stability, ensuring it continues to play a vital role in the economy.

NationPress

9 May 2026

Frequently Asked Questions

What is the current outlook for India's sugar sector?

The outlook remains stable due to favorable domestic demand-supply dynamics, despite declines in global sugar prices.

What are the projected sugar production figures for India in SY2026?

Gross sugar production in SY2026 is expected to rise by 9.4% to 32.41 million metric tonnes.

How have global sugar prices changed recently?

Global sugar prices have fallen significantly, with raw sugar prices dropping to $313 per metric tonne in February 2026.

What factors are influencing sugar profitability in India?

Profitability is supported by improved cane availability, firm domestic sugar prices, and stable distillery performance.

What is the expected revenue growth for integrated sugar mills in FY2026?