India faces two years of sugar surplus, growers and officials say

Gulf Today

14-06-2025

India is set to produce surplus sugar for at least two consecutive years, as millions of farmers expand the area under sugarcane cultivation amid ample rainfall, boosting crop yields, growers and industry officials said.
The rebound in production would allow the world's second-largest sugar producer to increase exports in 2025/26, they said, after poor rainfall cut sugarcane yields and led to two years of export restrictions.
'Sugarcane usually gives us good returns, but sometimes we can't plant it due to a lack of water,' said Umesh Jagtap as he planted the crop on a three-acre plot in Maharashtra, a leading sugar producing state in the west.
'This year, we had heavy rain in May, and the forecast says more rain is on the way. So we're planning to plant more than usual.'
Farmers from Maharashtra and neighbouring Karnataka struggle to irrigate their sugarcane crop in May.
This year, however, Maharashtra and Karnataka received 1,007 per cent and 234 per cent more rainfall than average, respectively.
The rainfall will benefit the crop to be harvested in the 2025/26 season, starting October, and will also support planting for the 2026/27 harvest, said Prakash Naiknavare, managing director of the National Federation of Cooperative Sugar Factories (NFCSF).
Sugarcane typically takes 10 to 18 months from planting to harvest.
As a result, farmers who began planting this month are expected to harvest their crop during the 2026/27 season.
The NFCSF estimates gross sugar production in 2025/26 to rise by nearly a fifth from a year earlier, reaching 35 million metric tonnes.
For the 2024/25 marketing year to September, India's net sugar production is expected to fall below consumption for the first time in eight years.
This decline stems from a 2023 drought that hit sugarcane planting and forced India to prohibit sugar exports in 2023/24 and allowing merely 1 million tonnes in 2024/25.
India was the world's No. 2 sugar exporter during the five years to 2022/23, with volumes averaging 6.8 million tonnes annually. 'Looks like production is set to bounce back strongly, so New Delhi will probably have no trouble allowing exports of over 3 million tonnes in the next season starting October,' said a Mumbai-based trader with a global trade house.
Meanwhile Cristal Union, France's second-largest sugar and ethanol maker, on Tuesday posted a 62 per cent fall in net profit in 2024/25 to 117 million euros ($134 million), weighed down by a fall in sugar prices, and warned of weak results in the current fiscal year.
Sales for the year ended January 31 declined to 2.65 billion euros from 2.8 billion the previous year, while adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) fell by a third to 287 million euros, the cooperative said.
Other European sugar and ethanol groups, including France's largest producer Tereos and Germany's Suedzucker, have also posted steep profit declines, pressured by weak European sugar prices amid high local supply and strong Ukrainian imports.
Higher volumes partly offset the decline in European sugar prices and limited the fall in revenue, the group said.
However, a further slide in sugar prices since the start of the year and high costs were likely to weigh on this year's results, it said.
'The Group expects sharply lower results for 2025/26, as a result of much more unfavourable market conditions and sharply rising agricultural and industrial production costs,' the group said in a statement.
Meanwhile Argentina's government has increased the prices of sugar- and corn-based bioethanol for mandatory blending with fuels for local use, according to a resolution published in the Official Gazette on Friday.
The Energy Secretariat, under the Ministry of Economy, set the price of sugarcane-based bioethanol at 792.122 pesos (about $0.67) per liter, up from the previous price of 788.181 pesos per liter.
Meanwhile, the price of corn-based bioethanol rose to 726 pesos per liter (about $0.61), up from 722.395 pesos before the resolution was announced.
The changes take effect from the date of publication in the Official Gazette and will remain in effect until a new price is published to replace them.
Reuters