India's sugar production in the current season is now estimated at around 306 lakh tonnes, about 11% below the initial estimate of 343 lakh tonnes made by sugarcane-growing states, the government said on Friday.The government also rejected claims that diversion of sugar for ethanol production had contributed to tighter domestic supplies and rising prices, pointing out that the share of sugar diverted for ethanol has actually declined in recent years.The lower production estimate is expected to bring India's opening sugar stocks on October 1 down to around 33-34 lakh tonnes, compared with 50 lakh tonnes a year earlier. Officials, however, said the carry-over inventory should be adequate to meet domestic demand until fresh supplies from the new crushing season begin arriving.Also Read: India allows duty-free sugar imports as prices climb ahead of festive seasonThe assessment comes a day after the government allowed duty-free imports of 10 lakh tonnes of raw sugar amid concerns over domestic availability. Retail sugar prices rose to ₹58.2 per kg on Friday, up 20% from a month earlier and nearly 26% from a year ago.The food ministry attributed the price increase to several factors, including lower domestic output, higher demand ahead of the festive season, weather-related crop damage, tighter global supplies and speculation and hoarding.On ethanol, the ministry said the proportion of sugar diverted for ethanol production had fallen from about 12% in 2022-23 to around 9% in 2025-26. Nearly three-fourths of India's ethanol production now comes from grains, it added.States had initially estimated sugar output at 343 lakh tonnes for the October-September 2025-26 season, while the Indian Sugar and Bio-energy Manufacturers Association had projected production at around 348 lakh tonnes.Officials attributed the shortfall to excess rainfall in Maharashtra last October, as well as Red Rot and Top Borer diseases affecting sugarcane crops in Uttar Pradesh and Maharashtra.While signs of weaker production had emerged as early as January, mills continued crushing cane, officials said. Sugar exports began only in March and were banned in early May after the government received indications that output would be lower than initially expected.Also Read: Ethanol diversion not the reason behind sugar price rise, says govtThe government also pointed to tightening global sugar supplies, saying the global market is estimated to face a 33 lakh tonne deficit in 2026-27. Concerns over weather conditions have further clouded the global supply outlook, the food ministry said.(With inputs from TOI)