According to reports, India's sugar cane supply for the 2027-2028 crushing season could face severe challenges. Major sugar cane producing regions are being affected by the El Nino phenomenon, and planting progress for the new season may be constrained.

Citing the view of Prakash Naiknavare, General Director of the National Federation of Cooperative Sugar Factories (NFCSF), the report noted that declining new-season sugar cane planting in Maharashtra, Karnataka, and Gujarat may reduce the overall raw material availability for the 2027-2028 crushing season, thereby greatly increasing uncertainty over forward sugar production. He emphasized that, given potential climate pattern variables, sugar cane supply for that season has become a core risk point for the industry.

Production cut for the 2026-2027 season and domestic supply-demand balance

This warning comes as the market expects India's sugar production in the current 2026-2027 crushing season to decline. NFCSF estimates total sugar production for the season at about 29 million tons, down from 30.9 million tons in the previous season. However, a lower proportion of sugar diverted to ethanol production is expected to offset part of the bearish impact of the production decline, thereby ensuring sufficient domestic edible sugar supply.

According to NFCSF's assessment, India's overall sugar supply situation in 2026-2027 may even be slightly better than last year. The agency estimates domestic sugar consumption at about 28.5 million tons and assesses that there is basically no possibility of large-scale sugar imports or exports this season. By the end of September 2027, ending carryover stocks are expected to remain at about 4.253 million tons.

No short-term shortage risk, but drought forces early crushing

Naiknavare clearly stated that there will be no spot sugar shortage in October, that is, in the near term. Commercial carryover stocks at the beginning of this month were about 3.753 million tons, while normal monthly consumption is between 2.2 million and 2.4 million tons. In the first half of October alone, authorities had already issued about 1.4 million tons of sugar sales quotas.

At the same time, as drought conditions in Maharashtra and Karnataka continue to worsen, the sugar milling industry is considering starting the crushing period earlier.

Early crushing lowers sugar recovery rate, industry calls for policy subsidies

Naiknavare said that starting crushing operations earlier would allow farmers to complete sugar cane harvesting before water resources become extremely scarce, while also providing additional green fodder for livestock in areas facing feed shortages. However, the cost of early crushing is a lower sugar recovery rate and damaged total output, which will inevitably intensify financial pressure on both sugar mills and growers.

On that basis, NFCSF is seeking special compensation from the government to ease the economic shock caused by lower sugar recovery rates due to early crushing.

Heavy rain in Brazil disrupts harvest, supporting international raw sugar futures

In the global sugar market, prices have remained firm as market concerns over Brazil's crop intensify. The key central-south producing region of Brazil has suffered severe flooding, greatly disrupting the normal pace of sugar cane harvesting, where the regular crushing season usually runs from April to November.

Naiknavare pointed out that the harvesting disruptions have triggered market concerns that production in the world's largest sugar exporter may fall short of expectations. Expectations of tighter effective global supply continue to provide strong support for international raw sugar futures prices.

Greater tail risk for forward supply in the 2027-2028 season

For India's macroeconomic fundamentals, the most core hidden concern is not the current crushing season, but the 2027-2028 season. If the El Nino phenomenon substantially damages new-season planting in Maharashtra, Karnataka, and Gujarat, then the sugar cane supply side for the 2027-2028 crushing season will come under enormous downward pressure, further tightening the global sugar production supply-demand balance sheet for the following year.