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India's Sugar Sector Stable Despite Global Price Plunge, Says ICRA Report

A new ICRA report states India's sugar sector outlook is stable, supported by comfortable domestic demand-supply dynamics even as global prices have fallen sharply. The global price decline is attributed to a surplus, particularly from Brazil, with production outstripping consumption. Domestically, India's net sugar output is projected to be sufficient, with healthy closing stocks equivalent to two months of consumption. Operating margins for integrated sugar mills are expected to remain range-bound, supported by firm domestic prices and cane availability.

Key Points: India Sugar Outlook Stable as Global Prices Fall: ICRA

  • Global sugar surplus pressures prices
  • India's domestic supply-demand comfortable
  • Mills' operating margins seen range-bound
  • Ethanol diversion supports net sugar output
  • Closing stocks at ~2 months of consumption
2 min read

India sugar outlook stable despite global price fall: Report

ICRA report says India's sugar sector remains stable with strong domestic dynamics despite a global price drop driven by surplus Brazilian supply.

"The outlook for India's sugar sector remains stable with comfortable domestic demand-supply dynamics - ICRA Report"

New Delhi, March 13

The outlook for India's sugar sector remains stable with comfortable domestic demand-supply dynamics even as global sugar prices have declined sharply due to surplus supply from Brazil, a report said on Friday.

According to ICRA, international sugar prices in the 2026 sugar year have remained below current production costs and domestic price levels, largely due to higher global output.

Global sugar production for SY2025-26 is estimated at about 189.3 million metric tonnes, around 5 per cent higher than the previous year, while consumption is projected at 178.1 million metric tonnes, about 1 per cent higher year-on-year (YoY).

Moreover, raw sugar prices declined to $313 per metric tonne in February 2026 from $445 per metric tonne in February 2025, according to the report.

White sugar prices also fell to $408 per metric tonne from $532 per metric tonne during the same period, it added.

The premium between white and raw sugar stood at $95 per metric tonne in February 2026, compared with $87 per metric tonne a year earlier.

According to the third advance estimates of the Indian Sugar Mills Association, gross sugar production in SY2026 is expected to rise by 9.4 per cent to 32.41 million metric tonnes, compared with 29.6 million metric tonnes in the previous year.

After diverting an estimated 3.1 million metric tonnes of sugar towards ethanol production, net sugar output is projected at about 29.3 million metric tonnes.

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, which is equivalent to roughly two months of consumption.

ICRA has expected that the operating margins of integrated sugar mills will remain range-bound at around 10-10.5 per cent in FY2026, compared with 9.6 per cent in the previous year.

Profitability is likely to be supported by improved cane availability, firm domestic sugar prices and stable performance of the distillery segment.

Revenue growth for integrated sugar mills is projected to remain moderate at 5-8 per cent in FY2026.

However, margins may stay broadly stable as sugarcane prices have increased while ethanol prices have largely remained stagnant, according to the report.

- IANS

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Reader Comments

S
Shreya B
Stable domestic prices are a relief for common people. With global prices falling, I was worried about cheaper imports hurting our farmers. Glad the policies are protecting the local industry. Hope retail sugar prices don't spike now.
A
Aman W
The numbers look comfortable, but we must be cautious. Two months of closing stock is okay, but not a huge buffer if the monsoon fails. The focus should remain on improving irrigation and cane yield per hectare.
P
Priyanka N
As someone from a sugarcane farming family in UP, this is reassuring news. The increase in cane availability mentioned means better offtake for farmers. The stable margins for mills should hopefully translate to timely payments for our cane.
D
David E
Interesting analysis. The premium between white and raw sugar widening suggests refined sugar demand is holding up. From an investment perspective, integrated mills with distilleries seem to be the more resilient model, as the report indicates.
K
Kavitha C
While the sector outlook is stable, I respectfully think the report could delve deeper into the environmental cost. Sugarcane is a water-intensive crop. In states like Maharashtra, we need sustainable practices alongside production boosts.
V
Varun X
The ethanol diversion strategy is smart, but what about the export potential? Only 0.7 MMT exports projected

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