Sugar Industry Moves to Advance 2026-27 Crushing Season as Prices Surge and Stocks Tighten

The Indian Sugar & Bio-energy Manufacturers Association (ISMA) and the National Federation of Cooperative Sugar Factories Ltd. (NFCSF) have jointly proposed advancing the 2026-27 crushing season by 10–15 days from the normal schedule, subject to favourable agro-climatic conditions. The aim is to bring fresh sugar to market before festive-season demand peaks in October and November.

The proposal follows consultations with the Union Food Ministry and comes against the backdrop of ex-mill prices rising nearly 15% over the past month, stoking inflation concerns. ISMA Director General Deepak Ballani and NFCSF Managing Director Prakash Naiknavare said in a joint statement: "Indian sugar industry stands firmly with the Government of India in addressing the current perceived concerns regarding sugar availability. The industry has chosen to act in the larger national interest by proposing to advance the commencement of the crushing season to ensure adequate availability of sugar and maintain price stability."

Both bodies, however, maintain that the price spike does not reflect actual demand-supply fundamentals.

Even as retail concerns mount, the industry points out that average pan-India ex-mill sugar prices hovered around ₹39.5–40 per kg through June 2025-26 — below the estimated cost of production. Following the recent run-up, the season's average ex-mill realisation through end-July stood at ₹40–40.5 per kg, still short of the estimated production cost of around ₹42 per kg.

This context is critical for policymakers: while consumers are feeling price pressure, mills are not profiteering. The industry argues that advancing crushing — which means processing immature cane with lower sugar recovery rates — will impose real financial costs on factories, making the case for government support measures including:

• Compensation for reduced sugar recovery due to early crushing
• Additional domestic sale quota equivalent to October production
• Waiver of Central Goods and Services Tax (CGST) on domestic sugar sales

Without some form of relief, mills say their efficiency and profitability will take a measurable hit.

The urgency behind the proposal is rooted in a worsening production picture. India's sugar output in 2025-26 is now estimated at 27.9 million tonnes against domestic consumption of approximately 28.5 million tonnes — a deficit year for the second season running.

At the season's start, production had been projected at nearly 30.9 million tonnes, but weak monsoon conditions and lower sugarcane productivity dragged output lower. Uttar Pradesh recorded its lowest sugar production in nearly a decade, while Maharashtra also underperformed initial forecasts.

The supply squeeze has been deepened by exports and ethanol diversion. The Centre permitted exports of 1.5 million tonnes in December 2025 and a further 0.5 million tonnes in February 2026; though exports were suspended in May 2026, around 0.8 million tonnes had already been shipped by then. As a result, India's opening sugar stock on October 1, 2026 is projected to fall to around 3.5 million tonnes — the lowest opening inventory in several years.

Parallel to the industry's supply-side move, the Central Government has stepped up market oversight. From August 1 to November 30, 2026, the Department of Food and Public Distribution has imposed stock holding limits on sugar dealers: no dealer may hold stocks for more than 30 days from the date of receipt, or maintain inventories exceeding 4,000 quintals at any single time or location. Dealers must declare and update their stock positions weekly on the department's online portal.

In a separate enforcement action announced on July 24, the Department ordered nationwide physical verification of sugar stocks held by all mills between August 1 and August 14. Any gap between declared and actual stocks will be treated as a violation of the Sugar Control Order, 2025, attracting action under the Essential Commodities Act, 1955 and other applicable provisions.

Together, these measures signal that the government is unwilling to allow speculative hoarding to amplify what is already a structurally tight supply situation heading into the festive quarter.