India's sugar production has dropped 18% from its FY22 peak, while domestic consumption continues to rise, leading to a tighter supply-demand balance, according to a sector note by Exencial Research Partners. The report, titled "India Sugar: The Squeeze, The Cycle, The Shift," highlights that buffer stocks have fallen back to multi-year lows as output declines.
Production Decline and Record Consumption
India's sugar output fell to 29.3 million tonnes (MT) in FY25, an 8% year-on-year decline and a four-year low. In contrast, domestic consumption reached a record 29.0 MT in FY24, reflecting sustained demand growth. The report noted that the cushion between supply and demand has shrunk to just 0.3 MT in FY24, the tightest in a decade.
"Output has slipped 18% from FY22 peak, while domestic demand keeps climbing. Buffer stocks are now back to multi-year lows," the report said. Sugar production peaked at 35.8 MT in FY22, then declined to 32.8 MT in FY23, 32.0 MT in FY24, and further to 29.3 MT in FY25.
Outlook Depends on Monsoon and Ethanol Policy
The report said the industry's outlook now hinges on the upcoming crop cycle and government policy decisions. "With FY25 cane output below ISMA's earlier estimate, the cycle now hinges on FY26 monsoon and ethanol diversion policy," it added.
Export Revenues Show Signs of Recovery
On the export front, India's sugar export revenues remain well below the FY23 peak, though there are signs of stabilisation. FY26 export revenues tracked sideways for three quarters, then surged 34% quarter-on-quarter in March 2026, the biggest sequential jump since the FY22 boom unwound. India's sugar export revenue stood at USD 2.09 billion in FY26, down 64% from the FY23 peak of USD 5.77 billion. However, export earnings in the March 2026 quarter rose 34% quarter-on-quarter to USD 593 million, indicating a recovery in trade activity.
Shift in Export Destinations
The report also pointed to a shift in India's sugar export destinations. While Indonesia and Bangladesh were among the largest buyers during the FY22 export boom, African and Gulf nations now account for the bulk of shipments. "During the FY22 boom, Indonesia and Bangladesh anchored exports. In FY26, Africa and the Gulf are doing the heavy lifting — six of the top seven destinations," the report said. Among the leading destinations in FY26 were Somalia, Sudan, Djibouti, Sri Lanka, Tanzania and the UAE, highlighting a changing geography of India's sugar trade.
