El Niño along with drought raise concerns over India’s sugar production
India’s sugar production faces risks from strengthening El Niño and drought in Maharashtra, threatening sugarcane yields and sugar recovery in 2026-27. Retail sugar prices rose 18.8% year on year to ₹55.21/kg by October 8, 2026, while existing stocks are expected to meet domestic demand.
New Delhi: India’s sugar production outlook is facing growing uncertainty as El Niño strengthens and drought conditions in Maharashtra threaten sugarcane yields and sugar recovery. The World Meteorological Organization (WMO) has warned that a significant rainfall deficit in 2026 could reduce sucrose content in sugarcane, shrink the area available for harvesting and weigh on overall output, NDTV reported.
WMO Secretary-General Celeste Saulo said El Niño was firmly established and strengthening rapidly. Forecasts indicated a near-100% probability that the weather phenomenon would persist through February 2027, potentially making it one of the strongest events since at least 1950, she said.
The effects could extend beyond crop production to sugar mill operations. According to the WMO, water shortages and drought-like conditions could create additional difficulties for mills in early 2027, compounding the impact of lower cane yields and declining sugar recovery rates.
The concerns come as domestic sugar prices have climbed sharply over the past year. Data from the Department of Consumer Affairs show that the retail price of sugar rose from Rs 42.18 per kg on October 8, 2021, to Rs 46.49 per kg on the same date in 2025. By October 8, 2026, the price had increased to Rs 55.21 per kg, marking an 18.8% rise over the previous year.
The government has linked the recent increase to a combination of domestic and international factors. Adverse weather has damaged sugarcane crops in key growing regions, resulting in production falling short of expectations. At the same time, demand has strengthened with the start of the festive season, while tighter global supplies have pushed international sugar prices higher.
Authorities have also identified speculation and hoarding by some sections of the trade as factors contributing to the recent increase in retail prices.
Any prolonged disruption in the sugar sector could have wider economic consequences. Sugarcane supports the livelihoods of nearly five crore farmers and provides around five lakh jobs in sugar mills and related industries. A weaker crop could therefore affect sugar availability, prices, rural incomes and mill operations, with consequences for the broader agricultural economy.
The sector also plays an important role in India’s ethanol-blending programme, as a portion of sugar production is diverted towards ethanol manufacturing each year. Any significant decline in cane availability or sugar recovery could consequently put additional pressure on the industry as it balances sugar production with ethanol requirements.
India is not facing an immediate sugar shortage, and existing stocks are expected to be sufficient to meet domestic demand. However, the outlook will depend on how El Niño develops and whether dry conditions persist in the coming months.
If rainfall remains deficient, lower sugarcane yields and reduced sugar recovery could further tighten supplies. The 2026-27 sugar season will be important in determining whether the current price rise eases or the industry faces a more prolonged period of pressure.
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Source : ChiniMandi
