DBT Bureau
Pune, 3 May 2026
India’s sugar production is projected to rise 12% to 33.6 million tonnes in 2026-27, driven by higher cane acreage, improved recovery rates, and favorable monsoon conditions, according to USDA. Consecutive good monsoons have boosted water availability, supporting crop growth across key states like Maharashtra, Uttar Pradesh, and Karnataka. Recovery rates are expected to improve to 9.2%, enhancing output efficiency. Government support through FRP and ethanol policies continues to incentivize farmers. Meanwhile, consumption is forecast to grow modestly by 3%, ensuring a surplus year where production exceeds demand, marking a shift toward comfortable supply conditions.
Key Highlights
- India sugar output projected up 12% at 33.6 mt in 2026-27.
- Higher cane area and improved recovery drive production gains.
- Consecutive good monsoons boost water availability and crop health.
- Recovery rate seen rising to 9.2% from 8.3% this year.
- Production likely to exceed domestic consumption, ensuring surplus supply.
Sugar prices are expected to remain under mild pressure as India’s production outlook improves significantly for the 2026-27 season. Output is projected to rise by 12% to 33.6 million tonnes, supported by higher sugarcane acreage, improved crop conditions, and better recovery rates. This anticipated increase in supply could weigh on prices, especially as the market transitions into a surplus phase.
Supporting this outlook, sugarcane planted area is expected to increase by 2% to 5.9 million hectares, while cane production is projected at 463 million tonnes. The key driver behind this expansion is the benefit of two consecutive favourable monsoons, which replenished groundwater and improved irrigation availability across major producing states such as Maharashtra, Uttar Pradesh, and Karnataka. Improved soil moisture has also enhanced sucrose formation, pushing recovery rates higher to an estimated 9.2% compared to 8.3% in the current season.
Additionally, government support policies, including the Fair and Remunerative Price (FRP) and ethanol blending incentives, continue to encourage farmers to prioritize sugarcane over alternative crops. Stable policy backing and operational continuity in mills are further expected to support production efficiency.
On the demand side, sugar consumption is forecast to grow by 3% to 31 million tonnes, driven by steady domestic demand and rising preference for traditional sweeteners like khandsari and jaggery. However, with production expected to exceed consumption for the first time in two years, overall supply conditions are likely to remain comfortable.
Overall, higher production and surplus supply outlook may cap sugar prices, though policy support and steady demand could limit sharp downside in the coming season.
