Indian industry rules out sugar shortage, says there’s enough stock to meet festival demand

Two of the major Indian sugar industry trade bodies on Wednesday ruled out any shortage of the commodity in the country, while assuring that there’s enough supply to meet the domestic demand in the upcoming festival season.

The Indian Sugar & Bio-energy Manufacturers Association (ISMA) and the National Federation of Co-operative Sugar Factories (NFCSF) jointly reassured that domestic sugar availability remains sound, while dismissing any claims of a structural domestic deficit.

“Through our coordinated efforts with the Government of India, the sugar ecosystem has successfully stabilised supplies, guided ex-mill prices to cool by nearly 30 per cent from peak, and firmly dismantled unwarranted scarcity narratives across the domestic trade,” the trade bodies said in a statement.

“We wish to place recent market movements in their complete economic and operational context. For the vast majority of the 2025–26 season, mills have realised prices well below the normative cost of production, with pan-India season average ex-mill prices hovering around ₹39.5–₹40 per kg in June, ₹40–₹40.5 per kg in July, and roughly ₹41- 41.5 per kg through August 2026 - still trailing the industry’s average production cost of approximately ₹42 per kg. 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,” they said.

Transparent quota releases and prompt regulatory liquidations have already brought ex-mill prices down by 30 per cent. “We are seeing this correction actively filter down to retail shelves to protect consumers. Our sugar mills have stepped forward to advance the commencement of the 2026–27 crushing season by nearly 10 to 15 days. Combined with ongoing, uninterrupted special crushing operations in Tamil Nadu and Karnataka, this early start guarantees a direct injection of fresh physical sugar into the distribution grid ahead of peak festive demand,” they said.

“We are actively matching this output with the dynamic fortnightly sales quota framework established by the Ministry of Consumer Affairs, Food & Public Distribution, which has allocated 13 lakh metric tonnes for 1st fortnight of September’2026,” they said.

For the 2025–26 season, India’s net domestic sugar production stands at approximately 279 lakh tonnes -- achieved from gross output of ~309 lakh tonnes after a planned diversion of 30 lakh tonnes toward our green energy ethanol commitments -- comfortably covering naitonal consumption of 280 to 285 lakh tonnes. There’s healthy closing buffer of around 35 lakh tonnes, projected through the end of September 2026.

“When backed by early October output, the precautionary 10-lakh-tonne duty-free import allowance under TRQ (with around 8 lakh tonnes already allocated), and the Government’s additional 2-lakh tonne raw sugar import window alongside an additional 3 to 3.5 lakh tonnes supplies by refiners to hit domestic market by 15th October’2026 meaning thereby that physical availability is more than sufficient to preserve a generous inventory cushion.”

Further, the industry has honored its commitments to the farming community by disbursing nearly ₹1.10 lakh crore - representing approximately 97 per cent of total cane dues - keeping cane arrears near historic lows.

“We urge all market participants and the public to disregard unfounded deficit rumors, as ISMA and NFCSF remain steadfast in delivering an orderly, accessible, and well-supplied market throughout the festival season at reasonable prices as retail prices have cooled down to around Rs. 62 per kg i.e. by almost 5% from its peak and is expected to further go downwards,” the bodies said.