The sugar sector in India is predicted to remain stable, supported by favorable domestic demand-supply dynamics despite a significant drop in global sugar prices attributed to surplus supply from Brazil. International sugar prices for the 2026 sugar year have stayed below production costs and domestic levels due to increased global output. Global sugar production for SY2025-26 is estimated at 189.3 million metric tonnes, a 5% rise from the previous year, with consumption projected at 178.1 million metric tonnes, up by 1% year-on-year.
Raw sugar prices fell to $313 per metric tonne in February 2026 from $445 per metric tonne in February 2025, while white sugar prices dropped to $408 per metric tonne from $532 during the same period. The premium between white and raw sugar was $95 per metric tonne in February 2026, compared to $87 per metric tonne a year earlier. The Indian Sugar Mills Association’s third advance estimates anticipate a 9.4% increase in gross sugar production to 32.41 million metric tonnes in SY2026, with net sugar output projected at around 29.3 million metric tonnes after diverting 3.1 million metric tonnes towards ethanol production.
With domestic consumption estimated at 28.3 million metric tonnes and exports at 0.7 million metric tonnes, closing sugar stocks are expected to reach 5.6 million metric tonnes, equivalent to approximately two months of consumption. Integrated sugar mills are likely to maintain operating margins around 10-10.5% in FY2026, up from 9.6% in the previous year, supported by improved cane availability, stable domestic sugar prices, and a steady distillery segment performance. Revenue growth for these mills is forecasted to be moderate at 5-8% in FY2026, with margins expected to remain stable despite rising sugarcane prices and stagnant ethanol prices.
