The rise in output strengthens the outlook for surplus availability, adding momentum to expectations that the country could continue exports without risking domestic supply concerns.

Industry bodies reported that mills produced 4.1 million metric tons of sugar by the end of November, a notable increase from 2.88 million tons recorded at the same point last season.

The strong start to the 2025–26 sugar season reflects favourable growing conditions in several states and improvements in operational efficiency at mills.

Maharashtra, the country’s largest sugar-producing state, registered the biggest jump in output, with production more than tripling to 1.7 million tons during the two-month period.

Officials noted that enhanced cane quality, timely rainfall patterns, and early commencement of crushing contributed significantly to the strong performance this year.

Uttar Pradesh, the nation’s second-largest sugar producer, reported a 9 percent increase in production to 1.4 million tons.

State mills benefited from stable cane supplies, improved field management practices, and better plant performance, giving a boost to the overall national tally.

In contrast, production in Karnataka slipped to 774,000 tons, compared with 812,000 tons in the previous season.

The decline was attributed mainly to farmer protests over cane pricing, which affected crushing operations and caused intermittent disruptions across several districts.

The National Federation of Cooperative Sugar Factories stated that the recovery rate in the first two months of the season rose to 8.51 percent, up from 8.29 percent last year.

The sugar recovery rate is a crucial metric for the industry, reflecting the percentage of sugar extracted from sugarcane stalks—an improvement that directly enhances overall production levels.

With the strong recovery rate and increased output, industry associations believe India has the capacity to allow additional exports during the current season.

Lower diversion of sugarcane juice for ethanol blending, compared to previous years, has also contributed to a larger exportable surplus available for global markets.

The federation recommended that the government permit an additional 1 million metric tons of sugar exports this season, citing lower ethanol-related diversion as a key reason for the industry’s excess supply.

India had earlier approved exports of 1.5 million metric tons for the current cycle, though mills are facing challenges in securing export deals due to global prices falling below domestic market rates.

The Indian Sugar & Bio-Energy Manufacturers Association has also urged the government to revise the minimum selling price of sugar in the domestic market.

The association emphasised that the floor price has remained unchanged for over six years, even as mills continue to face rising production costs, making a revision necessary to maintain financial stability across the sector.

Industry leaders argue that an upward revision of the domestic floor price would help mills manage operational expenses and ensure timely payments to farmers, particularly in states where cane prices have increased.

With higher output expected to continue through the season, the financial health of mills is likely to remain a crucial consideration for policymakers.

As the harvest and crushing season progresses, analysts expect India’s sugar supply position to remain comfortable despite regional disruptions.

The combination of improved recovery rates and stronger early production has reinforced confidence in both domestic availability and export potential for the remainder of the season.

The government recently permitted a 1.5-million-metric-ton export quota for the ongoing season starting October 1. This decision followed expectations of a larger domestic surplus due to a reduced diversion of sugar toward ethanol blending programs.

However, trade officials say mills are unlikely to utilize the entire quota. The current price gap between global and domestic markets has created a situation where exporting offers no commercial incentive.

Industry participants note that Indian sugar currently trades at around $450 per ton on an FOB basis. This rate is approximately $25 per ton higher than benchmark futures, making Indian supplies less competitive overseas.

Only small volumes—about 10,000 tons—have been contracted so far, primarily for Afghanistan and select East African markets. Dealers say buyers are opting for higher-quality sugar elsewhere because it is more affordable in the current global environment.

Still, India is expected to become a key supplier again in early 2026 when production from Brazil, the world’s largest sugar producer, temporarily declines.

Brazil’s crushing season typically ends in November, creating a window in the first quarter where global buyers rely more heavily on Asian suppliers.

Demand from Asian and African countries is projected to rise sharply in January and February. These regions see increased consumption ahead of the fasting month of Ramadan, when communal meals and food preparation require additional sugar.

Traders say the seasonal surge may help support new shipments, but not enough to meet the full export limit. Unless global prices rise closer to India’s domestic levels, mills may continue holding back on major export commitments.

Market observers believe total exports for the season may reach around 800,000 tons. This mirrors the previous year, when only 775,000 tons were shipped against an approved quota of 1 million tons.

A reduced export volume from India—currently the world’s second-largest sugar producer—may influence the international market. Lower supplies from a major producer could help stabilize or lift global price levels over the coming months.

For now, millers remain cautious, closely watching developments in domestic pricing and international demand trends. The industry’s decisions over the next few weeks will determine how much of the approved quota is ultimately utilized.

If global prices strengthen, more mills may re-enter the export market. But if the price disparity persists, India may again fall short of its allotted export target for the second consecutive season.

The coming months will be significant for both domestic producers and international buyers. Seasonal demand, regional supply shifts, and price movements will shape the final export outcome for India’s sugar sector.