New Delhi, March 13 (IANS) The outlook for India’s sugar sector remains stable with comfortable domestic demand–supply dynamics even as global sugar prices have declined sharply due to surplus supply from Brazil, a report said on Friday.

According to ICRA, international sugar prices in the 2026 sugar year have remained below current production costs and domestic price levels, largely due to higher global output.

Global sugar production for SY2025–26 is estimated at about 189.3 million metric tonnes, around 5 per cent higher than the previous year, while consumption is projected at 178.1 million metric tonnes, about 1 per cent higher year-on-year (YoY).

Moreover, raw sugar prices declined to $313 per metric tonne in February 2026 from $445 per metric tonne in February 2025, according to the report.

White sugar prices also fell to $408 per metric tonne from $532 per metric tonne during the same period, it added.

The premium between white and raw sugar stood at $95 per metric tonne in February 2026, compared with $87 per metric tonne a year earlier.

According to the third advance estimates of the Indian Sugar Mills Association, gross sugar production in SY2026 is expected to rise by 9.4 per cent to 32.41 million metric tonnes, compared with 29.6 million metric tonnes in the previous year.

After diverting an estimated 3.1 million metric tonnes of sugar towards ethanol production, net sugar output is projected at about 29.3 million metric tonnes.

Domestic consumption estimated at 28.3 million metric tonnes and exports at 0.7 million metric tonnes, closing sugar stocks are expected to reach 5.6 million metric tonnes, which is equivalent to roughly two months of consumption.

ICRA has expected that the operating margins of integrated sugar mills will remain range-bound at around 10-10.5 per cent in FY2026, compared with 9.6 per cent in the previous year.

Profitability is likely to be supported by improved cane availability, firm domestic sugar prices and stable performance of the distillery segment.

Revenue growth for integrated sugar mills is projected to remain moderate at 5–8 per cent in FY2026.

However, margins may stay broadly stable as sugarcane prices have increased while ethanol prices have largely remained stagnant, according to the report.

–IANS

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