India’s gross sugar production in the next season may total 29-31 million tons, according to analysts, traders and industry participants surveyed by Bloomberg.
For the current season, the Indian Sugar and Bio Energy Manufacturers Association (ISMA) forecasts output at 31 million tons. That suggests the market is already pricing in a possible tightening of supply in one of the world’s most important sugar markets.
Weather remains the main risk. The International Sugar Organization (ISO) has warned that a stronger El Niño could hurt crops across several Asian countries and contribute to a global sugar deficit of about 260,000 tons. That matters especially for India, whose agriculture depends heavily on monsoon rainfall, currently running 15% below normal.
Expectations of a smaller crop have already fed into prices. Sugar futures in New York are up about 30% this year, while record-high domestic prices have prompted government intervention.
To curb prices at home, the Indian authorities have allowed duty-free imports of raw sugar. They have also imposed restrictions on inventories held by dealers and wholesale consumers in an effort to maintain adequate market supply.
Speaking at an industry conference in New Delhi, Gradient Commercial Pvt. board member Yatin Vadhvanan said the country may need to import sugar next year to build closing stocks. He added that current domestic prices are likely to encourage mills to produce more sugar instead of ethanol.
Six of the 11 respondents in Bloomberg’s survey believe sugar will not be diverted to ethanol production. Five others expect India will have to import sugar for a second straight year in order to replenish working inventories.
According to Covrig Analytics lead analyst Claudiu Covrig, India could begin importing sugar as early as next year, once the current quota is exhausted, to rebuild stocks. In his view, production will also decline in the 2027/2028 season, while imports could reach 2-3 million tons.
At the same time, the authorities have urged industry participants to keep sugar prices at reasonable levels and ensure sufficient supplies during the festive season. The government said it will closely monitor prices and review production volumes on a monthly basis.
India is the world’s largest sugar consumer and the second-largest producer, meaning any shift in its output can have a meaningful impact on the global market.
