Drought in Maharashtra, Karnataka hits cane crop; sugar prices may rise in coming months

The country's sugar production could fall in the 2026-27 season, which may push up sugar prices in the domestic market in the coming months. Maharashtra and Karnataka are facing severe drought. Water shortage has affected the sugarcane crop, and production and supply are set to feel the impact directly.

The concern was voiced by Sureshbhai Thakkar, vice-president of the Confederation of All India Traders (CAIT) and president of the Thane District Wholesale Traders Welfare Federation. According to Thakkar, drought and a shortage of irrigation water have affected the cane crop in many parts of Maharashtra and Karnataka.

According to industry estimates, the country's sugar output this season could be between 270 and 290 lakh tonnes. Some assessments fear it could shrink to as low as 270 lakh tonnes. Compared with the previous season, this fall could upset the balance between supply and prices in the market.

The water shortage is severe in Marathwada. Several districts of western Maharashtra, including Sangli and Kolhapur, also lack adequate water for irrigation. The situation is similar in parts of Karnataka. The effect is being felt on the current cane crop and could extend to cultivation next season, as farmers short of water may shift from sugarcane to other crops such as maize and soybean.

Along with lower availability of cane, a drop in the sugar recovery rate and rising demand from the jaggery industry are also affecting production. Around Kolhapur, some farmers are selling cane to jaggery makers instead of sugar mills because they are getting better prices.

According to figures, crushing had begun at 98 sugar mills in Maharashtra by October 28. About 55 lakh tonnes of cane had been crushed in the state, and the recovery rate was recorded at 7.27 per cent.

Domestic sugar consumption in the country is estimated at 285 to 290 lakh tonnes. If production stays around 270 lakh tonnes, the gap between demand and supply could widen. Imports may then be needed.

According to Department of Consumer Affairs data, the average retail price of sugar was Rs 58.87 a kg, while prices in different markets ranged between Rs 45 and Rs 76 a kg. Thakkar said water availability, cane recovery and the pace of crushing at mills will decide the direction of sugar prices in the coming months.