While the Centre has maintained its sugarcane production target at 500 million tonnes (mt) for 2026–27, a severe supply squeeze is brewing | Photo Credit: RAJU V

India's sugarcane acreage is on track to hit 5.85 million hectares (mh) for 2026-27, flat against last year's levels as sowing nears completion. However, with end-of-season closing stocks projected to plummet to their lowest in years, the government faces mounting pressure to safeguard domestic market availability and curb price volatility before freeing up supplies for export or ethanol blending.

According to data compiled by businessline from States and industry sources, sowing until the first week of June was 5.41 mh, down marginally from 5.43 mh a year ago. Frontline producer Uttar Pradesh leads the coverage at 2.8 mh (level with last year), while Maharashtra ticked up slightly to 1.18 mh and Karnataka dipped marginally to 0.43 mh.

While the Centre has maintained its sugarcane production target at 500 million tonnes (mt) for 2026–27, a severe supply squeeze is brewing. Strong domestic demand has outpaced supply, despite an official allocation of 13.3 mt for the first half of the current season. Mill despatches reveal actual consumption hit 14.4 mt, pushing projected full-year demand to 28.5-29 mt. With net production for the ongoing 2025–26 cycle expected to settle below 28 mt, India's opening buffer for next season is likely to decline to a multi-year low of 3.5–3.9 mt as of September 30, down from last year’s 4.9 mt.

Little room for relaxing policy

“Though the government had allocated 13.3 mt of sugar for domestic sales during the first six months of the current season, dispatches from mills show 14.4 mt were actually sold. This indicates the sugar consumption for the whole season could be 28.5-29 mt,” said an industry expert.

This thinning carry-forward inventory, combined with stagnant acreage and widespread forecasts of a deficient monsoon, leaves little room for policy relaxation. Crop yields in central and eastern UP, alongside Bihar, remain heavily dependent on the monsoon's spread, according to noted breeder Bakshi Ram.

Given that the government recently aborted its sugar export window, halting shipments at under 0.8 mt despite a 1.6 mt allocation, industry experts warn that the tightening buffer will force the Centre to aggressively prioritise domestic retail availability, stifling both export extensions and sweet-syrup diversions for ethanol blending.

Ethanol diversion

The diversion to ethanol is also expected to be less than 3 mt (in terms of sugar), industry sources said. “If the carry forward for next season is low and net production remains at the same level, where will the surplus and minimum buffer come to meet ethanol or export,” said the expert quoted earlier.

Published on June 9, 2026