'Sugar availability is more than sufficient': Industry dismisses shortage fears ahead of festive season

Sugar availability in India remains sound ahead of the festive season, and the country is expected to have a closing stock of around 35 lakh tonnes by the end of September, the Indian Sugar & Bio-energy Manufacturers Association (ISMA) and National Federation of Cooperative Sugar Factories (NFCSF) said on Wednesday.

The two industry bodies said domestic supplies were sufficient to meet festive demand and rejected concerns about a structural shortage. They said recent price movements had to be seen in the context of the broader 2025-26 season, when mills had largely sold sugar below their cost of production.

Pan-India average ex-mill prices were around ₹39.5-40 per kg in June, ₹40-40.5 per kg in July and ₹41-41.5 per kg in August, compared with an industry average production cost of about ₹42 per kg, the statement said.

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"The brief surge to ₹49–₹50 per kg witnessed in the third week of August applied strictly to an isolated, fractional volume of only 2 to 3 lakh tonnes, which in no way reflected season-wide economics or windfall gains," the bodies said.

"Transparent quota releases and prompt regulatory liquidations have already brought ex-mill prices down by 30%," ISMA and NFCSF said, adding that the correction was already reaching retail markets.

Retail sugar prices have fallen to around ₹62 per kg, nearly 5% below their peak, and are expected to decline further, the associations said.

Mills to start crushing earlier

Sugar mills are also advancing the start of the 2026-27 crushing season by 10-15 days, the industry bodies said. Special crushing operations in Tamil Nadu and Karnataka are continuing without interruption.

The earlier start will bring fresh physical sugar into the distribution system before peak festive demand, while mills will match supplies with the fortnightly sales quota set by the Ministry of Consumer Affairs, Food & Public Distribution. The government has allocated 13 lakh tonnes for the first fortnight of September.

The associations said the combination of existing stocks, early crushing and additional imports would ensure that the market remains well supplied through the festive period.

Production and imports provide buffer

India's gross sugar production in 2025-26 was around 309 lakh tonnes. Of this, 30 lakh tonnes was diverted towards ethanol production, leaving net domestic sugar production at about 279 lakh tonnes.

That compares with normative annual consumption of 280-285 lakh tonnes. Even so, the industry expects the country to have around 35 lakh tonnes of sugar in closing stock by the end of September.

The government has allowed 10 lakh tonnes of duty-free sugar imports under the tariff-rate quota, of which around 8 lakh tonnes has already been allocated. It has also opened an additional 2-lakh-tonne window for raw sugar imports.

Refiners are expected to supply another 3-3.5 lakh tonnes to the domestic market by October 15. "Physical availability is more than sufficient to preserve a generous inventory cushion," the associations said.

They also pointed to the pace of payments to sugarcane farmers as evidence of the industry's financial position. Mills have disbursed nearly ₹1.10 lakh crore, or about 97% of total cane dues, leaving arrears near historic lows.

The associations urged market participants and consumers to disregard what they called unfounded deficit rumours and said the industry remained committed to maintaining an orderly, accessible, and well-supplied market through the festive season at reasonable prices.