New Delhi – The Indian sugar industry has moved to allay concerns over potential shortages ahead of the crucial festive season, with leading bodies confirming more than adequate domestic availability. The Indian Sugar & Bio-energy Manufacturers Association (ISMA) and the National Federation of Cooperative Sugar Factories (NFCSF) stated on Wednesday that India is expected to maintain a robust closing stock of approximately 35 lakh tonnes by the end of September.
Industry representatives emphasized that current domestic supplies are fully sufficient to cater to festive demand, rejecting speculative fears of a structural shortage. They clarified that a brief surge in ex-mill prices to ₹49–₹50 per kg in late August was an isolated incident involving a fractional volume of only 2 to 3 lakh tonnes, which did not reflect broader market economics or windfall gains.
Market Stability and Price Correction
The associations highlighted that ex-mill prices have already seen a 30% reduction due to transparent quota releases and prompt regulatory liquidations. This correction is now reaching retail markets, with sugar prices falling to around ₹62 per kg, nearly 5% below their recent peak, and further declines anticipated.
For the 2025-26 season, mills largely sold sugar below their production costs, which averaged about ₹42 per kg. Average ex-mill prices were ₹39.5-40 per kg in June, ₹40-40.5 per kg in July, and ₹41-41.5 per kg in August, underscoring the financial pressures faced by producers.
Early Crushing and Import Buffer
To further bolster market supply, sugar mills are advancing the start of the 2026-27 crushing season by 10-15 days. This proactive measure will ensure fresh physical sugar enters the distribution system well before the peak festive demand. Special crushing operations are also continuing uninterrupted in Tamil Nadu and Karnataka.
The Ministry of Consumer Affairs, Food & Public Distribution has allocated 13 lakh tonnes for the first fortnight of September, which mills will match with their supplies. In addition to existing stocks and early crushing, government-approved imports provide an extra buffer. India's gross sugar production for 2025-26 was approximately 309 lakh tonnes, with 30 lakh tonnes diverted to ethanol production, leaving a net domestic supply of about 279 lakh tonnes against an annual consumption of 280-285 lakh tonnes.
“Physical availability is more than sufficient to preserve a generous inventory cushion,” stated the industry associations, urging consumers to disregard unfounded deficit rumors.
The government has allowed 10 lakh tonnes of duty-free sugar imports under the tariff-rate quota, with around 8 lakh tonnes already allocated. An additional 2-lakh-tonne window for raw sugar imports has also been opened. Refiners are expected to contribute another 3-3.5 lakh tonnes to the domestic market by October 15.
Commitment to Farmers and Consumers
The industry also pointed to the rapid pace of payments to sugarcane farmers as evidence of its stable financial health. Mills have disbursed nearly ₹1.10 lakh crore, representing about 97% of total cane dues, bringing arrears close to historic lows. This financial stability supports sustained production efforts.
ISMA and NFCSF reiterated their commitment to maintaining an orderly, accessible, and well-supplied market at reasonable prices throughout the festive season.