Sugar output may dip 11%, says govt, rules out ethanol diversion impact on prices
Says Drop Not Due To Ethanol Diversion
New Delhi: The government has estimated sugar production for the current season (October-September) at around 306 lakh tonnes, which is 11% lower than the initial projection of 343 lakh tonnes. The government dismissed allegations that sugar was being diverted for ethanol production, stating that the amount diverted is less than in previous years.
This lower output is expected to reduce the opening stock of sugar to around 33-34 lakh tonnes by October 1, down from 50 lakh tonnes the previous year. Despite the lower production, officials said there would be enough carry-over stock to meet demand until fresh sugar from the new crushing season arrives. Retail sugar prices surged to Rs 58.2 per kg due to a combination of factors, including lower-than-expected domestic production, increased demand before the festive season, weather-related damage to the crop, global supply tightening, and speculation and hoarding.
The government ruled out the impact of ethanol diversion on prices, noting that the share of diverted sugar has decreased from 12% in 2022-23 to 9% in 2025-26. Over three-quarters of India's ethanol now comes from grains. Reduced production was attributed to excess rain in Maharashtra last October and crop diseases in sugarcane fields in UP and Maharashtra.
Export of sugar began in March, but was halted early May once production concerns emerged. The global sugar deficit for 2026-27 is estimated at 33 lakh tonnes.
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