Maharashtra and Karnataka drive production surge as sector flags growing payment backlog

India’s sugar industry has reported a strong performance in the ongoing SS 2025–26 season, with total production reaching 247.54 lakh tons as of 28 February 2026, marking a 12 percent increase over 220.17 lakh tons recorded on the corresponding date last year. A total of 305 mills are currently operational across the country, compared to 330 operating during the same period in SS 2024–25.

The data, released by the Indian Sugar & Bio-energy Manufacturers Association (ISMA), reflects steady crushing progress despite a marginal decline in the number of operational factories this year. (Production figures are net of sugar diverted towards ethanol.)

State-Wise Performance

Uttar Pradesh, the country’s largest sugar producer, has recorded output of 74.83 lakh tons so far—an increase of 1.83 lakh tons (around 2.5 percent) over 73.00 lakh tons produced by end-February last year. Of the 120 mills that started operations this season, 105 remain operational, similar to last year’s level.

In Maharashtra, production has surged to 95.35 lakh tons compared to 75.05 lakh tons during the same period last season. Out of 210 mills that commenced operations, 88 are currently crushing, compared to 94 operating at this time last year.

Karnataka has produced 44.50 lakh tons, up from 38.20 lakh tons in the corresponding period of SS 2024–25. Of the 81 mills that started this season, 25 remain operational, slightly higher than 23 operating last year. Notably, some mills in South Karnataka are expected to resume operations during the special crushing season between June/July and September 2026.

Other states reported mixed trends. Gujarat produced 6.52 lakh tons (versus 6.82 lakh tons last year), while Tamil Nadu recorded 3.65 lakh tons, up from 3.01 lakh tons. Production in other states collectively stood at 22.69 lakh tons, compared to 24.09 lakh tons last season.

National Snapshot (as on 28 February)

Total mills started: 536 (vs 532 last year)

Closed: 231 (vs 202 last year)

Currently operating: 305 (vs 330 last year)

Total production: 247.54 lakh tons (vs 220.17 lakh tons last year)

Industry Seeks MSP Revision

As inventories rise with advancing crushing operations, the industry is urging an early upward revision of the Minimum Selling Price (MSP) of sugar. Rising production costs and subdued ex-mill realizations have intensified cash-flow pressures, resulting in mounting cane payment arrears.

In Maharashtra alone, cane arrears as of 15 February 2026 stood at Rs 4,601 crore, significantly higher than Rs 2,744 crore recorded on the same date last year.

Industry stakeholders emphasize that a timely MSP revision aligned with prevailing cost structures is essential to restore mill viability, accelerate farmer payments and maintain market stability—without imposing any additional fiscal burden on the Government.