A Matter of Concern for the Sugar Manufacturing Industry

– Prof. Nandkumar Kakirde

Sugar is consumed in excessive quantities throughout the day in our daily lives, from morning until night. Considering the alarmingly high prevalence of diabetes, India has been identified globally as the “diabetes capital.” Against this backdrop, growing health awareness regarding excessive sugar consumption is beginning to impact sugar manufacturing mills, and it cannot be ruled out that this trend may become a serious concern for the industry in the coming years. This article presents a comprehensive examination of this emerging issue.

For centuries, Indian dietary habits have included the continuous consumption of sweet foods from morning to evening. No ceremony or celebration is considered complete without sweets. From tea and coffee in the morning to breakfast items such as sweet porridge, cream rolls, cakes, and pedhas, and later delicacies like jalebi, basundi, shrikhand, rasgulla, and gulab jamun during lunch or dinner, sweet dishes are an integral feature of Indian meals.

As a result, India has emerged as the global “capital” of diabetes. At the same time, the country is also among the largest producers and consumers of sugar worldwide. However, over the past few years, increasing public awareness about diabetes, serious dietary advice discouraging excessive intake of sweets, continuous nutrition-related guidance in major cities, and the life-threatening experiences during the COVID-19 pandemic have made the general population more cautious about excessive sugar consumption.

In recent years, a gradual decline in the preference for sugar has become evident. The growing prevalence of diabetes and changing dietary habits have created a need to move away from sugar. According to a report by the Indian Sugar and Bio-Energy Manufacturers Association (ISMA), consumption of sucrose, or regular sugar, is expected to grow by only 1.42 percent this year.

As reported by Mint, a Mumbai-based daily, an industry body has projected that sugar consumption may actually begin to decline in the next financial year. Currently, sugar consumption across the country has stabilized, and a significant reduction is expected over the coming years.

Before the COVID-19 pandemic, sugar consumption had been increasing annually at a rate of approximately 4 to 4.25 percent for several years. In contrast, growth in sugar demand has now slowed considerably. Domestic sugar consumption is expected to rise only marginally from 28.1 million tonnes in 2024–25 to about 28.5 million tonnes by March 2026.

According to ISMA Director General Deepak Ballani, this sluggish growth reflects changing food preferences, increasing health consciousness, and a growing shift toward alternative sweeteners and low-sugar processed foods. In 2024, India consumed nearly 29 million tonnes of sugar. Compared to that level, the current year’s estimate is significantly lower, forcing sugar producers and their associations to take note.

At present, India has nearly 120 million people living with diabetes, while at least 15 million are in a pre-diabetic condition. Excessive sugar intake is clearly linked to type-2 diabetes, cardiovascular and vascular disorders, rising obesity, and other metabolic health risks. The Managing Director of the National Federation of Co-operative Sugar Factories Limited, Mr. Prakash P. Naiknavare, noted that sugar consumption was growing at over 4 percent annually until the COVID-19 pandemic.

However, post-pandemic, this growth has slowed significantly and is currently hovering at around 2 percent. Over the last few years, sugar consumption has largely remained stable, and in long-term comparison, demand appears to have reached a plateau. There is a strong likelihood that a noticeable decline will begin in the coming years. Indian consumers are increasingly turning to alternatives such as stevia. Many health-conscious consumers are also opting for natural sources of sweetness such as jaggery, dates, and fruits, which are considered healthier options.

While this development is not particularly encouraging for sugarcane farmers or sugar mills, public health professionals across the country are genuinely welcoming this change.

The shift is largely attributed to rising health awareness nationwide. The central government has enacted regulations to create awareness at all levels regarding sugar content in soft drinks, with enforcement being carried out by the “Sugar Board.” In particular, reducing the consumption of highly sweetened beverages has been emphasized as a measure to curb rising obesity among children.

However, since most soft drink manufacturers are multinational companies, their attractive advertising campaigns and sponsorship of major sporting events continue to exert a strong influence on consumers.

Senior cardiologist Dr. Niranjan Hiremeth of Bengaluru observed that today’s younger generation is more health-conscious and monitors sugar intake carefully. Nevertheless, many individuals are substituting sugar with artificial sweeteners, and excessive consumption of such substitutes may have harmful effects. In certain cases, links to cancer have also been identified.

From a public health perspective, senior expert Dr. Monasis Sahu of Delhi emphasized that the reduction in sugar consumption is an extremely positive and necessary development. Growing awareness about diabetes, obesity, and metabolic disorders has encouraged consumers over the past few years to reduce added sugar and seek healthier alternatives. This trend is expected to continue. Improved preventive healthcare and nutritional literacy are likely to result in a structural decline in per capita sugar consumption growth.

Looking at national sugar production figures, favorable rainfall and adequate reservoir water levels have improved sugar output in the past year. Sugar recovery has increased by nearly 20 percent, and production in 2025–26 is estimated at 30 to 31 million tonnes. The area under sugarcane cultivation for the current season has also increased and is estimated at 5.73 million hectares, reflecting a slight rise compared to the previous year.

While changing diets and rising health awareness are reducing direct sugar consumption, indirect usage through sweets, bakery products, and other processed foods continues at a substantial level. Sugar consumption is particularly noticeable during social events and dining outside the home. Despite this, overall consumption figures do not indicate any significant increase.

Against this backdrop, India’s sugar exports have slowed in recent years due to higher domestic prices compared to Brazil in the international market, resulting in adverse impacts over the past one to two years. On the other hand, the central government introduced the ethanol policy in 2018 to encourage sugar mills to produce fuel ethanol. Today, most mills are generating ethanol and earning substantial additional revenue.

To support sugarcane farmers, the government is promoting ethanol production and its blending with petrol. However, there are complaints that ethanol usage adversely affects vehicle engines, though this issue has not received sufficient attention. Ethanol production has enabled sugar mills to diversify their income sources and reduce dependence on sugar sales.

Nevertheless, sugar producers are demanding that the central government review this policy from the perspective of ensuring fair returns to farmers and maintain a strategic balance between sugar and ethanol production. The target of blending up to 20 percent ethanol in petrol has not yet been achieved. As a result, achieving the right balance between public health priorities and the sustainability of sugar mills remains a major challenge for the central government. There is hope that a balanced and practical solution will be found soon.

(The author is a Pune-based senior economic journalist and former bank director.)