India’s sugar output is expected to rebound in SY2026, driven by improved crop quality. This progress results from a higher proportion of cane planting and adequate water availability. The OMCs have allocated around 1,048 crore litres of ethanol against 1,776 crore litres of offers submitted by manufacturers across the countryfor ESY 2025–26 (Cycle 1). OMCs had invited tenders for the supply of 1,050 crore litres of ethanol for ESY 2025–26.

• Sugar Demand–Supply Balance Estimates – As per ISMA’s* first advance estimates, gross sugar production for SY2026* is projected to increase by 16% at 34.4 million MT (P.Y. 29.6 million MT). The net sugar production, after an estimated diversion of 3.4 million MT towards ethanol production, is likely to remain at 31.0 million MT. Considering the domestic consumption of 28.5 million MT and export of 1.5 million MT, the closing sugar stock is expected to be 6.3 million MT (P.Y. 5.3 million MT), which is about three months of consumption, indicating a comfortable demand-supply scenario.

• Sugar Production – Sugar production in SY2025 fell by 7.2% to 29.61 million MT from 34.1 million MT in SY2024, mainly due to lower sugarcane availability, adverse weather, and pest outbreaks in key states like Uttar Pradesh and Maharashtra. Output is projected to rebound by 16% to 34.4 million MT in SY2026, primarily driven by a favourable monsoon and improved crop conditions across major regions. The increase is largely from Maharashtra and Karnataka, while Uttar Pradesh is expected to remain at previous year levels.

Exhibit: Yearly trends in sugar production, consumption and closing stock

Source: ISMA, ICRA Research; SY: sugar year (from October 01 to September 30)