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Informist, Tuesday, Sept. 15, 2026

 

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--ISMA Ballani: See Oct sugar supply "very good" to meet festival demand
--CONTEXT: ISMA Director General Deepak Ballani in interview with Informist
--ISMA Ballani: See Oct sugar supply 4.6 mln tn or above, vs 2.5 mln demand  
--ISMA Ballani: Refineries will release 250,000-300,000 tn sugar by Oct end
--ISMA Ballani: Sugar mills to advance crush ops, see Oct output 800,000 tn 
--ISMA Ballani: Global sugar prices high, but import parity may emerge later
--ISMA Ballani: Don't see govt now halting sugar diversion for ethanol output
--ISMA Ballani: Most of sugar-based ethanol was already supplied before Aug
--ISMA Ballani: Ethanol supply from sugar industry very little in Aug-Oct
--ISMA Ballani: Sugar diversion for ethanol next yr to depend on cane crop
--ISMA Ballani: Mills to give govt monthly data on sugarcane yield from Oct
--ISMA Ballani: To detail the upcoming 2026-27 sugar output view in Oct
--ISMA Ballaini: Improving technology to better estimate sugar production
--ISMA Ballani: Aim to bring estimate-actual output deviation below 5%

 

By Afra Abubacker

 

NEW DELHI –  India's sugar market is likely to be well supplied in October ahead of festivals such as Diwali and the wedding season in November. As a result of several government interventions to boost supply, October is likely to have at least 4.6 million tonnes of sugar in supply, against the demand of 2.4-2.5 million tonnes, said Deepak Ballani, director general of the Indian Sugar & Bio-Energy Manufacturers Association.

 

There is no sugar shortage in the country but sugar production has fallen short of earlier expectations. Sugar prices rose to record highs in August amid limited market supplies and increased speculation about stock availability. 

 

The current sugar season is estimated to close with a carryover of 3.5 million tonnes of sugar as of Sept. 30, Ballani said. This was considered a tight supply situation, as fresh sugar supplies typically pick up pace only from November, while sugar demand starts peaking from October ahead of Diwali. Last year, the closing stock was 5.0 million tonnes, and nearly 8 million tonnes in 2023-24.

 

However, Ballani said that the market is no longer tight, as the government has taken several measures, including imposing stock limits on traders and permitting duty-free sugar imports to remove the speculative premium in prices and prevent any further "perception of tightness" in the market. Although easing ex-mill sugar prices has made sugar imports less viable at current global prices, Ballani said improved import parity may emerge in the coming weeks. 

 

Below are the edited excerpts from the interview: 

 

Q. The government has taken a lot of steps to improve sugar supply in October ahead of festivals, such as Diwali in November. They allowed mills to import duty-free raw sugar and asked export-oriented refineries to divert some sugar processed from previously imported raw sugar to domestic markets. Industry bodies have also urged sugar mills to advance their crushing operations to mid-August. So, how much sugar is likely to be available in October? 

 

A. I can't tell how much imports would actually come by October. But refiners will definitely release 250,000-300,000 tonnes of sugar by Oct. 31. So, that adds to the September closing stock of 3.5 million tonnes. Normally, we produce 300,000-400,000 tonnes of sugar in October, subject to agroclimatic conditions. But this time, we expect mills in western Uttar Pradesh, Maharashtra, and Karnataka to start crushing early, around Oct. 22 or 23, after Dussehra. So, roughly, we expect around 800,000 tonnes of sugar production in October.

 

So, with the September closing stock, October sugar production, and refinery supplies, we would have 4.6 million tonnes of sugar in October, plus whatever imports would take place. I can't tell how much additional supply would come from imports, because it depends on mills' capacity to process raw sugar. But 4.6 million tonnes is a very good starting point, because the October requirement would be a maximum of 2.4 million-2.5 million tonnes. We have enough sugar for the coming months. (India annually consumes about 28 million-29 million tonnes of sugar, with monthly demand increasing in the summer season and festivals to 2.3 million-2.4 million tonnes)

 

Q. Ex-mill prices have started declining, and it's a relief to consumers and the government. But can imports still be viable when global sugar prices are rising? Do you still see import parity at current domestic prices? 

 

A. Parity will come and go. At the moment, imports may be slightly difficult depending on the price. Take the example of exports. When the government allowed exports, parity was weak, but later it emerged. So, price parity can come, but we need to keep a window open for exports or imports. It would be good if some physical sugar arrived from global markets. It will ease any perception of tightness. 

 

Global sugar prices are at 18-19 cents per pound, so the landing cost is approximately INR 51-INR 52 per kg. So, domestic prices should be INR 52 or above, but most domestic markets are below those levels. But if the world market wants to export to India, it will have to align with domestic prices at some point. (Friday, sugar prices in Uttar Pradesh markets were INR 4,550–INR 4,600 per 100 kg, and in Maharashtra it was INR 4,770-INR 5,152. In Karnataka, prices were around INR 4,700–INR 4,740, and INR 4,800-INR 5,030 in Tamil Nadu, it was. In August, prices were at a record INR 6,000-INR 6,400 per 100 kg, significantly up from INR 4,600-INR 4,800 in July.)

 

Q. ISMA conducted an audience poll at the recent conference in New Delhi on expectations about government policies on sugar diversion for ethanol production and exports for the next season 2026-27. The sentiment was quite pessimistic, with most participants saying they expected the government to restrict ethanol production from sugarcane-based feedstocks next year. How do you assess this possibility? 

 

A. That was the view of individual people sitting in the audience, including mills, trade, and industry. It is not ISMA's view. Having said that, all these things will only be clear once we have the crop and sugar production outlook. That would give us a better indication of how much sugar can be diverted for ethanol. So, unless we have a sugar production outlook, it is very difficult to say what the government policies would be. 

 

Q. Is there a fear among industry that the government may restrict sugar diversion for ethanol production this year during the final quarter (Aug-Oct) of the ethanol supply year? 

 

A. In any case, the sugar industry does not supply much ethanol in the fourth quarter. Whatever ethanol we had to make from sugarcane juice or B-heavy molasses is already complete. So, there is no point in the government halting sugar diversion now, because all the ethanol that could be produced is already made, and we supply hardly any quantity to oil marketing companies in the fourth quarter. Yes, we will supply some ethanol from C-heavy molasses in this quarter, but there is no sugar sacrifice, as sugar cannot be made from it. (Oil companies had given supply orders for 2.89 billion litres of ethanol from sugar-based feedstocks for ethanol supply year 2025-26 (Nov-Oct), and distillers have supplied 2.71 billion litres of ethanol by August end) 

 

Q. At the recent conference, ISMA did not give sugar production estimates for 2026-27, but said sugarcane area has contracted moderately. And September rains are critical for sugarcane yields. Can you elaborate a bit on the crop's condition? 

 

A. Sugarcane acreage is slightly below last year's level, but rains so far have been less. And crop yield will depend on September and October rains. That is why we said we are cautiously assessing the crop. So far, we have not really done a yield assessment or sugar recovery assessment. We will do them later when we are more certain about the crop's condition. That's why we have delayed our sugar production estimates to October. We don't want our sugar production estimates to go wrong. 

 

Q. Considering how ISMA's production estimates have deviated widely from actual sugar output, do you think the association should widen its deviation margin to 8-10%?

 

A. An 8-10?viation is a very big margin. Assuming production is around 30 million-32 million tonnes, an 8-10?viation would mean nearly 3 million tonnes, which changes the entire supply scenario. The aim is to keep the deviation below 5%. Any deviation above 5% is a very bad assessment. (ISMA in November estimated net sugar output at 30.95 million tonnes, nearly 10% higher than its revised estimate of 27.9 million tonnes)

 

Q. But we have been witnessing how sugar production estimates keep deviating sharply as the season progresses. How does the association aim to resolve the issue? 

 

A. We are improving our technology. We are using artificial intelligence, machine learning, and 10 years of historical data. We use some 20-30 parameters, including temperature, rainfall, and others, to assess how these parameters fared in the last 10 years and their impact on the sugarcane crop. Sugarcane is a difficult crop because it is a long-duration crop. Some crops take 12 months, while others take 15 months, or 18 months to mature. So, the same weather conditions would have very different impacts on each crop. 

 

Q. To improve the accuracy of production data, the government has said that it will start collecting additional information on sugarcane yield to formulate better-informed policies. Will the government source this data independently, or obtain it from the industry? 

 

A. It is from the industry. Currently, the government obtains only sugar production and sales data monthly from mills through the P-II form. From October, they will start collecting more data, like how much sugarcane was crushed and expectation for the coming months, as well as how much sugar was recovered from cane. This would give a dynamic assessment of how the crop is looking and what the sugar production might be. It is a very good initiative for better season assessments. (Counting on early strong sugar production estimates, the government allowed over 1.5 million tonnes of sugar exports, and mills shipped out 800,000 tonnes before the export ban in May. The government also allowed over 3 million tonnes of sugar diversion for ethanol production in 2025-26)

 

Q. With record high sugar prices and several government interventions, how would you review the current sugar year 2025-26 (Oct-Sep)? 

 

A. Definitely, it was a challenging year. Sugar production was not as high as initially expected and suddenly prices rose sharply in August. First, not securing enough ethanol allocations for the sugar industry was an issue, and later, high sugar prices became an issue. Obviously, this year has not been easy. We hope for a more stable sugar season next year, and that the industry is aligned with the government. The idea is that retail sugar prices should be stable and reasonable for consumers. Having said that, there has to be a balance between mills' sugar production cost, ex-mill sugar prices, and retail prices.   End

 

 

Edited by Akul Nishant Akhoury

 

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