India’s total sugar production is anticipated to rise by 15 Percent to around 35 million tonnes in the season of 2026. According to the recent report released by the Crisil, this increase will help in easing the tight domestic supply situation and exports are likely to improve with policy support. The increase is attributed to above-average monsoon which has led to increased sugarcane sowing and yield in leading sugar producing states like Maharashtra and Karnataka.
Increase in Ethanol Production
Ethanol production is also expected to increase in the 2026 sugar season. It may touch the new heights of 4 million tonnes from 3.5 million tonnes in 2025. It will be backed by higher sugar production as well as the ambitious target of government of blending 20 percent ethanol. Government is promoting ethanol production to generate quick cash flow which is a source of additional income for farmers and sugar mills. Sugar mill operating margins are estimated to recover to 9-9.5 per cent in FY26, improving the credit profile of sugar producing companies that were facing pressure in the previous fiscal.
India’s sugar production in the 2023-24 marketing year (October-September) was 302.02 lakh tonnes till March 31, 2024. However, in 2024-25 sugar season, India’s sugar production sugar season has been estimated by many agencies to decline by 18% to 25.49 million tonnes.