India cuts foodgrain target; USDA trims sugar forecast

Drought, uneven monsoon rains and strengthening El Niño concerns are weighing on India’s agricultural outlook, leading the government to set a lower 2026–27 foodgrain target and encourage farmers in water-stressed areas to favor less water-intensive crops. Weather-related risks are also expected to reduce domestic vegetable oil production by 5–10%, potentially lifting import costs as El Niño threatens palm oil supplies from Southeast Asia. The USDA has cut its forecast for India’s 2026–27 sugar production to 29.5 million tonnes, citing poor rainfall, lower sugarcane yields and weaker sugar recovery; projected consumption would exceed output, raising concerns about a widening supply shortfall. The assessments point to pressure across multiple crops, though rainfall and crop conditions vary significantly by region.