New Delhi: India is set to produce a record amount of sugar in the upcoming marketing year, starting in October, as millions of farmers expand their cane cultivation, driven by abundant water supplies and lower prices for alternative crops, according to farmers and industry experts speaking to Reuters.

This surge in production is expected to allow India, the world's second-largest sugar producer, to resume exports in the 2025/26 season, after two years of export restrictions due to poor rainfall and reduced cane yields. Traders suggest that Indian exports could help stabilize global sugar prices by boosting supply in the world market, especially as drought conditions in Brazil are expected to limit their shipments.

"Last year, we couldn't plant cane because there was no water for irrigation. This year, the rainfall has been good, and we have plenty of water," said Amar Chavan, a farmer from Maharashtra's Solapur district, who has planted sugarcane on 2.4 hectares (6 acres). Farmers in Solapur depend on the Ujjani dam, which is now full, compared to just 25% of capacity last December.

Reserves in Maharashtra and neighboring Karnataka, which together account for nearly half of India's sugar production, are holding significantly more water than in 2023, government data shows. India's annual monsoon rains play a crucial role in determining the planting area for sugarcane, a water-intensive crop. This year, regions in Maharashtra and Karnataka saw up to 39% more rain than usual.

"Farmers are planting sugarcane in full force, setting the stage for a record-breaking sugar harvest next season," said Prakash Naiknavare, managing director of the National Federation of Cooperative Sugar Factories.

Sugar production in India for the current season is projected to fall to 28 million metric tons, down from 31.9 million tons the previous year, and below the country’s annual consumption of about 29.6 million tons. However, abundant water isn’t the only factor driving increased cane planting. Many farmers have turned to sugarcane after suffering poor returns from crops like soybeans and cotton.

"Farmers who switched to other crops last year due to water scarcity ended up with losses. Now, they are seeking crops that offer guaranteed returns," explained B. B. Thombare, managing director of Natural Sugar & Allied Industries, a sugar mill in Maharashtra.

With the anticipated increase in cane cultivation, India could export between 3 million to 5 million tons of sugar in the next season, assuming favorable weather conditions and no significant pest outbreaks, said Ashwini Bansod, vice president of commodities research at Phillip Capital India.

India, which exports sugar to countries like Indonesia, Bangladesh, and the United Arab Emirates, was the world’s second-largest sugar exporter during the five years leading up to 2022/23, with an average annual volume of 6.8 million tons.