Plunging sugar reserves threaten domestic supply
India's sugar reserves are projected to plummet to 4.1 million tonnes by September 30, 2026, marking the tightest supply level in nearly a decade. Data from the National Federation of Cooperative Sugar Factories (NFCSF) indicates that total output for the 2025-26 season will likely settle at 28.1 million tonnes. This significant drop from initial forecasts of 34.9 million tonnes stems from adverse weather patterns, specifically heavy rains and persistent cloud cover in late 2025 that stunted crop growth.
Sugarcane growers and processing units face a dual crisis of rising costs and frozen revenues. While the Fair and Remunerative Price (FRP) paid to farmers increased by Rs 650 per tonne, the government-mandated Minimum Selling Price (MSP) for sugar has remained stagnant at Rs 31 per kg since 2019. Production costs now average Rs 4,100 per quintal, yet market rates in regions like Maharashtra and Karnataka often hover well below this threshold. This disparity forces mills to absorb losses of roughly Rs 250 per quintal, jeopardizing future planting cycles.
International dynamics further complicate the domestic outlook. Brazil, the top global exporter, recently shifted its focus toward ethanol production, potentially tightening the world market. For Odisha, where sugarcane serves as a vital cash crop in districts like Nayagarh and Ganjam, these national price fluctuations directly impact the viability of local cooperative mills and rural income stability.
Logistical hurdles, including geopolitical tensions in the Middle East, have slowed India's planned 2-million-tonne export quota. Industry leaders like Harshvardhan Patil are calling for an immediate MSP hike to Rs 41 per kg and an upward revision of ethanol prices to prevent a total collapse in farmer interest. Without these interventions, the thinning buffer stock—usually intended to cover three months of national consumption—could vanish entirely by the next harvest.
