Record Cane Harvest Yet Falling Sugar Output Triggers Price Spike

India recorded a record‑high cane harvest this season, with the agriculture ministry estimating more than five million kilotonnes of sugarcane. Yet the expected bounty has not translated into higher sugar supplies.

The missing link is the sugar recovery rate. While the volume of cane processed by mills was abundant, the average recovery slipped to 8.91 per cent, down from the typical 9.70 per cent. This decline means less sugar is extracted from each tonne of cane, shrinking overall production.

Adding to the shortfall, crop‑specific challenges have emerged. Red Rot, a fungal disease, attacks the inner stalk of the cane, reducing sucrose levels. Simultaneously, the Top Borer insect damages the upper sections of the plant, further degrading quality. These ailments were observed across major growing regions during surveys conducted in early 2026.

The combined effect of lower recovery and disease‑induced quality loss has reduced the projected sugar output to roughly 306 lakh metric tonnes for the 2025‑26 marketing year—over ten per cent lower than the earlier estimate of 343 LMT.

With supply constrained, market dynamics have shifted. Wholesale prices now range from Rs 5,300 to Rs 6,000 per quintal in cities such as Lucknow, Delhi and Hyderabad, while retail rates hover around Rs 55‑65 per kilogram. The price pressure is feeding through to sweets, bakery items and beverages, just as consumers prepare for festival purchases.

Policymakers face a balancing act: easing export permissions that were granted on the expectation of surplus while ensuring sufficient domestic stock to stabilise prices ahead of the festive calendar.