Unlikely to See Softening in Sugar Market Due to 'Normal' Quota

10-Jul-2026 06:26 PM

New Delhi: The domestic sales quota of 2.2 million tonnes (22 lakh tonnes) of sugar released by the Union Ministry of Food for the current month (July) appears normal, considering current demand and consumption patterns. Although monsoon activity is bringing rain to various parts of the country, temperatures have not dropped significantly; consequently, the demand for sugar for ice cream and cold drink manufacturing remains robust. Demand for domestic household consumption is also being observed.

A special sugarcane crushing session typically takes place in North Karnataka and Tamil Nadu during July and August, yielding between 300,000 and 400,000 tonnes (3–4 lakh tonnes) of sugar. However, a lack of rainfall in June has adversely affected the sugarcane crop in these regions,

making it likely that sugar production will fall short of expectations. While it was previously estimated that total sugar production for the entire 2025-26 marketing season (October–September) would reach around 28 million tonnes (280 lakh tonnes), that projection is now in doubt.

Sugarcane and sugar production are also likely to decline in the 2026-27 season. Furthermore, the industry's carry-over surplus stock of sugar will remain limited. The festive season is set to begin next month. Sugar prices rose by 6–7 percent in June, and there is little likelihood of a softening in prices during July. This trend will provide relief to sugar mills.