New Delhi, March 14
The prices of sugar globally have declined sharply amid surplus supply from Brazil, even as the outlook for the Indian sugar sector remains stable, according to a report by ICRA Limited.
The report noted that international sugar prices in SY2026 have remained lower than the current cost of sugar production and prevailing domestic prices, mainly due to surplus sugar supply from Brazil.
It stated, "Global sugar prices fall sharply due to Brazil surplus."
Reflecting the oversupply in the global market, the report stated that the raw sugar prices fell to USD 313 per metric tonne in February 2026 from USD 445 per metric tonne in February 2025. Similarly, white sugar prices declined to USD 408 per metric tonne from USD 532 per metric tonne during the same period.
The premium between white and raw sugar stood at USD 95 per metric tonne in February 2026, compared with USD 87 per metric tonne in February 2025.
According to the report, global sugar production for SY2025-SY2026 is estimated at 189.3 million metric tonnes, which is about 5 per cent higher than the previous year. Meanwhile, global consumption is expected at 178.1 million metric tonnes, around 1 per cent higher year-on-year.
Despite the volatility in global prices, the demand-supply situation in India remains comfortable.
As per the third advance estimates of the Indian Sugar Mills Association, gross sugar production in SY2026 is projected to increase by 9.4 per cent to 32.41 million metric tonnes, compared with 29.6 million metric tonnes in the previous year.
After an estimated diversion of 3.1 million metric tonnes towards ethanol production, net sugar production is likely to remain at 29.3 million metric tonnes.
Considering domestic consumption of 28.3 million metric tonnes and exports of 0.7 million metric tonnes, the closing sugar stock is expected to reach 5.6 million metric tonnes, which is equivalent to about two months of consumption.
ICRA expects the operating margins of its sample set of integrated sugar mills to remain range-bound at around 10-10.5 per cent in FY2026, compared with 9.6 per cent in the previous year.
The report said profitability is supported by improved cane availability, firm domestic sugar prices and comfortable performance of the distillery segment.
Revenue growth for integrated sugar mills is projected to remain moderate at 5-8 per cent in FY2026, supported by higher cane availability and stable sugar prices. However, margins are expected to remain broadly stable as cane prices have increased while ethanol prices have largely remained stagnant.
India continues to make progress on ethanol blending, achieving a blending ratio of 19.98 per cent during the first three months of ESY2026, with 239 crore litres blended, including 59.2 crore litres in January 2026.
For SY2026, the Fair and Remunerative Price (FRP) for sugarcane has been increased by Rs 15 to Rs 355 per quintal for a basic recovery rate of 10.25 per cent.
In Uttar Pradesh, the State Advised Price (SAP) has been raised to Rs 400 per quintal for early-maturing varieties and Rs 390 per quintal for normal varieties.
- ANI
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