Industry calls for timely policy support to sustain momentum

India’s sugar industry has entered the final phase of the 2025–26 crushing season, with total sugar production reaching 274.8 lakh tons as of April 15, 2026, marking an 8 per cent increase over 254.96 lakh tons recorded during the same period last year. The higher output ensures comfortable domestic availability, even as the season winds down.

Currently, 19 factories remain operational, significantly lower than the 38 mills running at this time last year, reflecting the seasonal closure of operations across key producing states.

State-wise Performance Highlights

Uttar Pradesh produced 89.26 lakh tons, slightly lower than last year’s 91.10 lakh tons. Only 6 mills remain operational, compared to 22 last year.

Maharashtra recorded a sharp rise to 99.30 lakh tons, up from 80.88 lakh tons last year, with all mills now closed for the main season.

Karnataka also reported strong growth, producing 48.10 lakh tons versus 40.40 lakh tons last year. While main season operations have concluded, some mills are expected to resume during the special season (June/July 2026).

Tamil Nadu continues operations with 13 mills active, producing 5.25 lakh tons, higher than last year’s 4.58 lakh tons.

Other states collectively contributed 25.69 lakh tons, compared to 29.08 lakh tons last year.

(Note: Production figures are net of sugar diverted towards ethanol production.)

Industry Seeks MSP Revision

As the season concludes, the industry has emphasized the urgent need for an early revision of the Minimum Selling Price (MSP) of sugar. Rising production costs and weak ex-mill realizations are placing pressure on mill cash flows, leading to increasing cane payment arrears.

A timely MSP revision aligned with current cost structures is seen as critical to:

Restoring financial viability of mills

Enabling prompt payments to farmers

Maintaining market stability — all without imposing additional fiscal burden on the government.

Push for Ethanol Blending Expansion

Amid rising crude oil prices and evolving geopolitical dynamics, the industry has reiterated the importance of accelerating India’s ethanol blending program. With an estimated production capacity of ~2000 crore litres (including grain-based ethanol), stakeholders are advocating for:

A roadmap beyond E20 toward higher blends such as E22, E25, E27, and E85/E100

Faster rollout of flex-fuel vehicles (FFVs)

GST rationalisation to support ethanol adoption

Policy Gaps Impacting Ethanol Sector

The sector also highlighted key challenges:

No recent revision in ethanol procurement prices for sugarcane-based feedstocks

Lower allocation to the sugar sector, leading to underutilized distillation capacity

Resulting inventory build-up and inefficiencies

Timely price revisions and policy clarity are essential to ensure feedstock parity and encourage optimal capacity utilization.

Additional Demand-Side Concerns

Ongoing LPG supply disruptions have adversely affected food outlet operations, indirectly dampening sugar consumption and adding to industry pressures.