Sugar stocks under pressure as cane acreage stays flat; government faces tough balancing act
India’s 2026-27 sugarcane acreage is expected to remain stable at about 5.85 million hectares, while sugar stocks may fall to 3.5-3.9 million tonnes. Strong domestic demand, stagnant acreage and weaker monsoon risks could limit sugar exports and ethanol diversion to ensure adequate local supplies.
India’s sugarcane acreage is expected to remain almost unchanged in the 2026-27 season, raising concerns over sugar availability as stocks are projected to fall to their lowest levels in years. With domestic demand continuing to outpace supply, the government may have limited flexibility on sugar exports and ethanol diversion in the coming season.
Data compiled from State governments and industry sources show that sugarcane sowing reached 5.41 million hectares (mh) by the first week of June, compared to 5.43 mh during the same period last year. As planting nears completion, total acreage is expected to touch 5.85 mh, largely matching last year’s coverage, The Hindu Businessline reported.
Among the major sugar-producing States, Uttar Pradesh remains the largest contributor with 2.8 mh under cane cultivation, unchanged from a year ago. Maharashtra recorded a slight increase to 1.18 mh, while Karnataka saw a marginal decline to 0.43 mh.
Although the Centre has retained its sugarcane production target of 500 million tonnes (mt) for 2026-27, industry estimates point to growing pressure on sugar supplies. Demand has remained strong throughout the current season. While the government allocated 13.3 mt of sugar for domestic sales during the first half of the season, actual mill dispatches reached 14.4 mt.
According to industry estimates, total sugar consumption for the current season could rise to 28.5-29 mt. At the same time, net sugar production during the ongoing 2025-26 season is expected to remain below 28 mt. As a result, opening stocks for the next season are projected to decline sharply to 3.5-3.9 mt by September 30, compared with 4.9 mt a year earlier.
An industry expert said that the higher-than-expected sugar sales during the first six months indicate stronger consumption trends, which could push total seasonal demand close to 29 mt.
The situation becomes more challenging as sugarcane acreage remains stagnant and forecasts point to a weaker monsoon. According to noted breeder Bakshi Ram, cane yields in central and eastern Uttar Pradesh as well as Bihar are heavily dependent on monsoon conditions.
The shrinking stock position is also expected to influence government policy. Earlier, the Centre stopped sugar exports after shipments remained below 0.8 mt, despite allowing exports of 1.6 mt. Industry experts believe that with lower carry-forward stocks, the government will be compelled to focus on ensuring adequate domestic availability, leaving little scope for expanding exports or diverting larger quantities of sugar for ethanol production.
Industry sources also expect sugar diversion for ethanol to remain below 3 mt in sugar-equivalent terms. Experts argue that if carry-forward stocks decline and production remains at current levels, there will be little surplus available to support either additional ethanol blending requirements or future export commitments while maintaining the minimum stock buffer needed for the domestic market.
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Source : ChiniMandi
