The Indian sugar industry has said that consumption of sugar, which was higher by 60,000 tonnes until February in the current season from the allocation, dropped by 2 lakh tonnes in March and will likely to see a same level of fall this month. This is due to lower temperature and the crisis because of short supply of LPG cylinders.

The Food Ministry, which regulates sugar sector, allocated 110.5 lakh tonnes (lt) of sugar in the first five months (October-February) of 2025-26 season to mills for domestic sales, which was 3.5 per cent lower from 114.5 lt from the year-ago period. The ministry had released 22.5 lt in March and 23 lt for April, which is 0.5 lt, each less from the year-ago period.

Speaking to media on the sidelines of an event, Deepak Ballani, Director-General of Indian Sugar & Bio-energy Manufacturers Association (ISMA), said that the despatches (sales) by mills during October-February was 60,000 tonnes more than the allocated quota.

Gross output

Ballani said that sugar consumption in the whole season may drop to 277 lt in 2025-26 from 281 lt in 2024-25. Food Ministry data show that the allocation of domestic sales quota was 275.5 lt in the entire 2025-26 season.

He also said that gross sugar production is likely to be 320 lt this season, which is marginally lower than ISMA’s previous estimate of 324 lt. The net output may be 285-286 lt after considering 34-35 lt of diversion towards ethanol.

Food Secretary Sanjeev Chopra said that the government is expecting gross sugar production in current season to be between 320 lt and 325 lt, which is lower from its initial estimate of 330 lt. He also said that diversion towards ethanol could be 35 lt, leaving a net sugar output of 285-290 lt.

On plans to ban sugar exports, he said: “As of now, there is no such proposal.” He also said that the government had approved over 15 lt of sugar for export, but initially there was an export parity issue. But after the fighting started in West Asia, prices have firmed up a bit, which has boosted exports. “Still, I think it will be very challenging for us to see the entire quantity which we’ve approved as getting exported,” Chopra said.

Chopra clarified that the quantity that will not get exported, will remain in the country and add to the closing balance. “Next year, when we consider the diversion for ethanol, if our closing balance is that large, we will have more flexibility, and we can probably do more of the ethanol blending,” he said.

Panel looking at flex-fuel vehicle policy

“India, having achieved E20, appears increasingly likely to pursue a further expansion of its ethanol mandate. While India has capacity for further ethanol expansion, realising it will require the country to further restrict sugar exports, weighing on global supply and underpinning prices at the margin,” BMI, a unit of Fitch Solutions, said in a report, “Outlook for sugar prices” as published in businessline on April 6.

Asked specifically on any plan to raise ethanol blending beyond 20 per cent, the Food Secretary said that current capacity is almost 2,000 crore litres per annum, which is surplus compared to demand. “What should be done with it (surplus) - whether increase the ethanol blending percentage or look at other avenues, there are many suggestions like promoting flex-fuel vehicles. A committee has been formed to consider this, and I think before the next ethanol season begins (from November 2026), the government will probably have some news on that as well,” Chopra said.

On the demand for allowing ethanol in stoves, he said that it needs some regulatory changes to be done by the Petroleum Ministry and the Bureau of Indian Standards (BIS). “That is right now under consideration, and I am hopeful that some enabling provisions can be made so that at least in the vicinity of the ethanol distilleries, we can popularize the ethanol stove,” he said. The industry’s demand to raise minimum selling price of sugar is still under consideration, he added.

On wheat crop outlook, Chopra said it is looking good. But, there were requests from Haryana and Rajasthan for relaxation of the FAQ (Fair Average Quality) norms after the unseasonal rains hit the crop. “We have sent our teams to these states to find out the ground-level position, and if required, we’ll give them the relaxation very soon so that the farmers do not suffer any problem in selling the produce,” he said. The food secretary also ruled out any plan to lower import duty on edible oils.

Published on April 7, 2026