Report

Many sugar mills in India stopped crushing cane from mid-May because there wasn’t enough sugarcane to process. According to India Ratings (Ind-Ra), this shortage has pushed sugar prices up by about 5% in the first quarter of FY26. Sugar prices rose from ₹34 per kg in July 2023 to ₹40.3 per kg in May 2025. To help farmers deal with the lower yields, the government has increased the fair and remunerative price (FRP) for sugarcane by 8% for the 2025 season and plans to raise it another 4.4% for 2026. States are also likely to increase their cane prices by around 5% this year.

Red Rot Infestation Hits Yields Hard

Poor harvests and a serious Red Rot disease have cut India’s sugar production. India Ratings (Ind-Ra) says total sugar output may fall by 15% to about 29–29.5 million tonnes this season, the lowest in five years. Since the government lifted the ban on using sugar for ethanol in August 2024, mills are sending more sugar for fuel production — around 3.2–3.4 million tonnes this year. This will reduce the sugar available for the market, bringing net production down to about 26–26.2 million tonnes.

Food Safety Risks Rise as Prices Surge

As sugar becomes costlier and scarcer, the chances of adulteration and hoarding increase. Consumers should stay alert, and authorities may need to boost quality checks to keep unsafe or substandard sugar out of the market.

Source: AgriInsite