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A bitter aftertaste hits India amid ethanol questions

By Sohail Khan 22 August 2026, 5:48 pm

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Business News›News›Economy›Agriculture›India’s sugar stockpile set to shrink as output estimate falls: Govt

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India’s sugar stockpile set to shrink as output estimate falls: Govt

Synopsis

India's sugar production estimate has fallen significantly, impacting opening stocks for the new season. This lower output is expected to meet domestic demand until fresh supplies arrive. Retail sugar prices have risen sharply due to several contributing factors. The government has allowed duty-free imports of raw sugar to address availability concerns. Diversion of sugar for ethanol production has also seen a recent decline.

India's sugar production in the current season is now estimated at around 306 lakh tonnes, about 11% below the initial estimate of 343 lakh tonnes made by sugarcane-growing states, the government said on Friday.

The government also rejected claims that diversion of sugar for ethanol production had contributed to tighter domestic supplies and rising prices, pointing out that the share of sugar diverted for ethanol has actually declined in recent years.

The lower production estimate is expected to bring India's opening sugar stocks on October 1 down to around 33-34 lakh tonnes, compared with 50 lakh tonnes a year earlier. Officials, however, said the carry-over inventory should be adequate to meet domestic demand until fresh supplies from the new crushing season begin arriving.

States had initially estimated sugar output at 343 lakh tonnes for the October-September 2025-26 season, while the Indian Sugar and Bio-energy Manufacturers Association had projected production at around 348 lakh tonnes.

Officials attributed the shortfall to excess rainfall in Maharashtra last October, as well as Red Rot and Top Borer diseases affecting sugarcane crops in Uttar Pradesh and Maharashtra.

While signs of weaker production had emerged as early as January, mills continued crushing cane, officials said. Sugar exports began only in March and were banned in early May after the government received indications that output would be lower than initially expected.

Also Read: Ethanol diversion not the reason behind sugar price rise, says govt

The government also pointed to tightening global sugar supplies, saying the global market is estimated to face a 33 lakh tonne deficit in 2026-27. Concerns over weather conditions have further clouded the global supply outlook, the food ministry said.

(With inputs from )

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