India’s sugar industry is undergoing a major transformation. Record sugarcane production, improved farmer payments and ethanol blending have changed the sector’s outlook. Meanwhile, recent sugar price discussions created several assumptions around ethanol. However, government data presents a different picture.
The sector now supports rural livelihoods and economic growth. India recorded 500 million metric tonnes (MMT) of sugarcane production. Additionally, a new Fair and Remunerative Price (FRP) of ₹365 per quintal strengthened the industry. More than 97% pending payments reached farmers, while government measures maintained sugar supply and prices.
Numbers Reveal The Changing Sugar Industry Story
According to the third advance estimate for 2025-26, India’s sugarcane production reached 500 MMT. Compared with 348.44 MMT production in 2015-16, the sector recorded around 43.5% growth in ten years.
Moreover, sugarcane cultivation expanded during this period. The farming area increased from 49.27 lakh hectares in 2015-16 to 58.87 lakh hectares in 2025-26. Uttar Pradesh and Maharashtra continued as major sugarcane producing states.
Furthermore, India increased sugar exports significantly. The country exported 0.47 lakh metric tonnes in 2016-17. However, exports reached 8 lakh metric tonnes in 2025-26.
Ethanol Shift Changed The Industry Structure
The role of ethanol in the sugar sector has changed significantly. Around 75% of ethanol production now comes from maize and other grains.
Meanwhile, sugar used for ethanol production reduced from nearly 12% in 2022-23 to around 9% in 2025-26. Therefore, ethanol production now depends more on grains, especially maize.
Additionally, stronger sugar mill finances improved farmer payments. Mills paid 97% of total sugarcane dues for the 2025-26 season. As a result, their dependence on government support reduced.
Sugar Prices Remain Under Government Watch
Recently, sugar prices increased due to short-term market factors. On July 20, 2026, sugar prices stood at ₹48.18 per kilogram. By August 20, 2026, prices reached ₹55.70 per kilogram.
However, between August 2024 and July 2026, retail sugar prices increased only around 3% annually. The recent rise reflects temporary supply factors and seasonal demand.
Meanwhile, global sugar shortages also affected prices. The estimated global deficit for 2026-27 stands at around 33 lakh metric tonnes. International sugar prices increased from $474 per tonne on June 30, 2026, to $552 per tonne on August 20, 2026.
Government Steps To Control Sugar Supply
The government introduced several measures to manage sugar prices. From August 1, 2026, sugar dealers across India must follow a 400-tonne stock limit until November 30, 2026.
Additionally, from September 1, 2026, bulk consumers cannot store sugar beyond 15 days of consumption. Government teams from central and state authorities are also checking sugar stocks physically.
These steps aim to prevent hoarding and artificial shortages. The industry’s latest numbers show a sector moving beyond traditional sugar production towards a broader energy-linked future.
