India, the world's largest sugar consumer, will import about one million tonnes of sugar for the first time in nearly a decade as domestic prices rose sharply in recent months.

Sugar production is projected at 30.6 million tonnes for the 2025‑2026 season, about 11% lower than earlier government estimates. The shortfall stems from lower rainfall linked to El Niño, disease in cane varieties, and reduced monsoon rains in key growing states.

Wholesale prices climbed from roughly 40‑45 rupees per kilogram in May‑June to more than 58‑60 rupees in August. The government approved exports of 1.5 million tonnes at the start of the season and an additional 500,000 tonnes in February; exports were halted in May after the shortfall became apparent.

Vikram Suryavanshi, a senior analyst at PhillipCapital India, said the large variance between initial production estimates and the actual shortfall was a surprise. Atul Chaturvedi, non‑executive director of Shree Renuka Sugars, said the imported sugar would provide a market buffer. Deepak Ballani of the Indian Sugar Mills Association (ISMA) argued that inventory levels and scheduled releases were comfortable and that speculation and hoarding, rather than a genuine shortage, were driving price gains. The government has capped stocks held by traders and wholesalers at 400 tonnes for three months to curb hoarding.

ISMA has urged mills to begin crushing cane two weeks earlier than usual to build stocks as the new harvest arrives in October, but erratic weather continues to affect yields. Thinner cane with lower sucrose content is expected to reduce output further.

Chaturvedi noted that at current price levels it may not be economically viable for mills to divert cane to ethanol, suggesting a possible improvement in supply next year, though accurate crop estimates remain crucial.