Higher sugar prices push Indian mills to prioritize sugar over ethanol
AI Market Summary
Indian sugar prices near ₹46/kg are prompting mills to prioritize sugar output over ethanol/ENA, supported by strong domestic demand and rainfall deficits in Maharashtra and Karnataka that may constrain supply. Guidance from major producers points to near-term maximization of sugar production, while 2025-26 diversion to ethanol is still projected at 3mt, with 0.9mt linked to the E20 program. The shift tightens near-term sugar availability and supports sugar benchmarks.
Impact level
● Medium
Affected assets
NCCOSUGAR2USD/USDT-1.45%
AI Insight · NCCOSUGAR2USD/USDTAI Insight
▲ Bullish
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Indian sugar prices are currently around ₹46 per kg ex-mill, prompting mills to favor sugar production over ethanol because it offers better returns. As of August 17, whole rates rose to about ₹45.2–45.25 per kg as deficient rainfall in Maharashtra and Karnataka weighed on output while domestic demand remained strong. For the 2025-26 sugar year, India’s total sugarcane diversion to ethanol is estimated at three million tons, including about 0.9 million tons that directly supports the government’s E20 blending program.
