After consistently allocating lower sugar for sales in the domestic market, the Indian government has allotted a 22.5 lakh tonnes (lt) quota for August, which is the same as the year-ago period. This is seen as a move to check any further price rise.However, with depleting stock of sugar in the country and limited option available for the government to augment supply, the festival demand during October-November will have to largely depend on fresh production. Historically sugarcane crushing peaks up after Diwali when labour returns to work in sugarcane field and since this year the festival is to be celebrated November 8, the government may have to curb diversion of sugarcane juice for ethanol at least for first three months of the 2026-27 season to make sure domestic market gets adequate sugar, sources said.Sales top quotaWith the sugar quota for August announced by the Food Ministry, total allocation during October 2025-August 2026 has reached 245.5 lt, which is 2.6 per cent lower than 252 lt in the year-ago period. Industry sources said that some mills have been selling more sugar in the market than their allotted quotas for which the government has also been cutting their entitlements.As against 201 lt sugar allocated by the government during October 2025-June 2026, as much as 214 lt was sold, industry sources said. Sensing that there may be lower sugar available with mills, the government on July 24 announced it would conduct physical verification of stock in every mill in the first fortnight of August. Besides, stock limit has been imposed.“All these steps show panic reaction after allowing sugar for export and ethanol without ensuring adequate reserve for the domestic market. This lesson may discourage the government to allow any sugar (sucrose) for ethanol next year as it will be at the cost of domestic stock,” an industry veteran said.November surplusIf sugarcane juice is curbed, only B- and C-heavy molasses are the other two options for ethanol feedstock and allowing B-heavy molasses means reduced sugar production and C-heavy molasses production can be about 300 crore litres, he said adding there is also demand from liquor, pharmaceutical, chemical and other industrial sectors for the alcohol/spirit.Asked on the sugar scenario in India, G K Sood, a former India head of a global trading firm, said that even if 35 lt opening stock as on October 1, 2026 is presumed to be available, historically production in the first month does not cross 5 lt, making availability to maximum 40 lt in October. “If the government maintains domestic sales quota for October 2026 at same level as a year ago, 24 lt sugar will be needed, leaving a surplus of 16 lt for November,” said Sood.He said that at the current crop conditions and acreage position, so far, India’s sugar production in 2026-27 may at best be at the same level as this season. But, as export and diversion to ethanol is unlikely next year, the government may be able to raise closing stock on September 2027 to about 50 lt. However, the fate of sugar will depend on how the rainfall and temperature fans out in next two months. Government data show that India’s sugarcane sowing is already over and reported to be at 57.58 lakh hectares (lh) this year. The final area under cane in 2025 was 58.84 lh. The government said that among the top three states (account for India’s 85 per cent sugar production), Uttar Pradesh has reported an area coverage of 28.97 lh, Maharashtra 11.82 lh and Karnataka 6.61 lh. In 2025, the final sugarcane area in Uttar Pradesh, Maharashtra and Karnataka were 28.02 lh, 13.72 lh and 6.51 lh, respectively.“The crop is in very good conditions and if all go well in next two-three months, the yield may be higher this year as there was a drop in 2025,” said Param Jeet Singh Hudda, a sugarcane farmer in Shamli district of western Uttar Pradesh. He said pest appeared in the crop in many areas in the region around mid-August last year and it had actually lowered the yield.Published on July 29, 2026