Forecasted Sugar Output For This Season At Lowest In Five Years
India’s sugar production for the 2024-25 season is anticipated to reach a five-year low of 29.5 million tonnes (MT), primarily due to insufficient rainfall and the spread of red-rot disease. Nevertheless, the country will fulfill its domestic sugar demand thanks to adequate closing stock levels and increased diversion of sugar to ethanol production. A recovery in production is expected in the 2025-26 season as cane planting improves.
Earlier this month, the government approved a 4% increase in the fair and remunerative price (FRP) for sugarcane, raising the payment to farmers by mills to Rs 355 per quintal for the 2025-26 sugar season (October-September). As reported by the sugar industry, total sugar production—after accounting for ethanol diversion—is projected to decline by 7% compared to last year, hitting a five-year low of 29.5 MT in the upcoming season.
This drop in output is primarily due to a lower recovery rate resulting from insufficient monsoon rains in 2023, alongside instances of red-rot disease reported in certain areas of Uttar Pradesh, negatively affecting yield as noted by trade and government representatives. However, the industry has assured that there will be enough supplies to meet demand during the upcoming festive months.
The Indian Sugar and Bio-Energy Manufacturers Association (ISMA) indicates that the 2024-25 season will likely finish with sugar production estimated between 26.1 to 26.2 MT, of which 25.74 MT has already been produced. This total does not include the 3.3 to 3.4 MT of sugar earmarked for ethanol production this season, a significant increase from the 2.15 MT diverted for biofuel in the previous 2023-24 season.
Currently, out of the 534 sugar mills across major sugar-producing states such as Uttar Pradesh, Maharashtra, and Karnataka, crushing operations have concluded, except for two mills in Tamil Nadu. The special crushing season in Tamil Nadu and Karnataka is set to start next month. According to Deepak Ballani, director general of ISMA, “Despite the decrease in output, there will be ample stocks to satisfy domestic demand.” The industry estimates current domestic sweetener demand at 28 MT, with sugar exports projected at approximately 0.9 MT.
Ballani noted that the current season began with an opening stock of 8 MT as of October 1, 2024, and the closing stock by the end of this season is expected to be around 5.3 to 5.4 MT, sufficient to cover domestic sweetener consumption for the following two months (October-November). With sugarcane crushing starting from October 1, the sweetener is expected to reach markets within two months. “This suggests that the nation will maintain sufficient stocks to comfortably meet domestic needs,” Ballani added.
Following above-average monsoon rains last season, sugarcane planting in the southern region has shown significant improvement in key states such as Maharashtra and Karnataka. Ballani of ISMA previously indicated, “The crushing season is expected to commence on schedule in October 2025, ensuring adequate supply conditions that will enhance output in the 2025-26 season.”
In other news, industry sources report that so far, 0.4 MT of sugar has been exported this season, with a contract signed for an additional 0.3 MT shipment. After implementing restrictions on sugar exports in the 2023-24 season, the government allowed for the export of one MT of sugar in January 2025, taking into account domestic supply and diversion for ethanol production. The government also approved a 4% increase in the FRP of sugarcane for mills in the 2025-26 season, raising it to Rs 355.
