India '25-26 sugar output may rise but export seen limited - Fitch Solutions
This story was originally published at 13:25 IST on 6 June 2025
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NEW DELHI – Though India's sugar output is likely to grow significantly in 2025-26 (Oct-Sept), its role in global sugar supply will likely remain limited, BMI, a unit of Fitch Solutions, said in a report. The Indian government is likely to prioritise sugar for ethanol blending requirements and ensure price stability, it added.
"Initial projections for India's 2025-26 sugar season suggest a notable 26.3% year-on-year increase in production, thanks to favorable weather conditions," the report said. Pointing out the slowdown in Indian sugar exports, the report said the country was unlikely to exhaust its export quota of 1 million tonnes in 2024-25. According to industry estimates, India is likely to export 800,000 tonnes in the 2024-25 season.
Meanwhile, global sugar prices declined amid improving supply prospects in key producing countries, the report said. "Despite a challenging start to Brazil's sugar production for the 2025-26 season, optimism remains for future output," the report said.
Additionally, Brazil's lower ethanol margins are prompting mills to divert more cane towards sugar. "...Domestic pricing dynamics now favour sugar, with 51.1% of sugarcane directed towards sugar production versus 48.9% for ethanol," the report said.
On Monday, July raw sugar futures on Intercontinental Exchange closed at 16.88 cents per pound, the lowest since June 2021 and down 1.9% on month. White sugar futures on the London exchange also fell 3.8% to 470.9 cents per pound, reflecting bearish momentum across the market, it added.
Despite the bearish tone, the report cautioned that the market was heavily reliant on the 2025-26 crop amid tight carryover stocks. According to the US Department of Agriculture estimates, global beginning stocks for the 2025-26 are projected at 38.3 million tonnes, down 15% on year, marking the lowest level since 2012-13.
"Therefore, despite optimistic forecasts and the narrative of abundant supplies...stocks remain constrained and could facilitate a sharp upturn in prices should any deterioration occur in current market projections for the 2025-26 season," the report said. End
US$1 = INR 85.71
Reported by Afra Abubacker
Edited by Akul Nishant Akhoury
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