Production rises in 2025–26 season even as mill closures accelerate, cane arrears widen and industry seeks higher MSP and ethanol policy support
India’s sugar production for the 2025–26 season stood at 275.28 lakh tonnes as of 30April registering a 7 per cent increase from 256.49 lakh tonnes recorded during the same period last year. Despite the higher output, the industry has once again urged the government to revise the minimum selling price (MSP) of sugar at the earliest.
Data released by the Indian Sugar and Bioenergy Manufacturers Association (ISMA) showed that only five sugar mills are currently operational, compared with 19 mills running at this point in the previous season.
Among key producing states, Uttar Pradesh reported output of 89.65 lakh tonnes till the end of April, lower than 92.40 lakh tonnes a year ago. All mills in the state have now concluded operations for the season, whereas 10 factories were still active on the corresponding date last year.
Maharashtra, on the other hand, saw a notable rise in production, reaching 99.2 lakh tonnes compared to 80.93 lakh tonnes in the same period last season. Karnataka also recorded higher output at 48.01 lakh tonnes, up from 40.40 lakh tonnes. Crushing operations in both states have ended for the main season, although some mills in Karnataka are expected to operate during the special season beginning June–July 2026.
In addition, certain mills in Tamil Nadu will continue operations in the special season. Historically, such off-season activity in Karnataka and Tamil Nadu contributes around 5 lakh tonnes to total sugar production.
With the season nearing closure, the industry has reiterated its demand for an MSP revision. Rising production costs and weak ex-mill realisations are putting pressure on mill cash flows and delaying payments to farmers.
In Maharashtra alone, cane arrears stood at Rs 2,130 crore as of mid-April, significantly higher than Rs 752 crore reported during the same period last year. ISMA said that a timely upward revision in MSP, aligned with current cost structures, is necessary to restore financial viability, ensure prompt payments to farmers and maintain market stability without adding to the government’s fiscal burden.
The association also pointed to the importance of expanding ethanol blending amid rising crude oil prices and evolving geopolitical developments. With an estimated production capacity of nearly 2,000 crore litres, including grain-based ethanol, the industry has advocated moving beyond the E20 target towards higher blends such as E22, E25, E27 and E85/E100. It has also called for faster rollout of flex-fuel vehicles and rationalisation of GST to support demand.
Further, ISMA noted that delays in revising ethanol procurement prices for sugarcane-based feedstocks, along with lower allocations, have created a mismatch between installed distillation capacity and domestic offtake. This has led to underutilisation of facilities, affecting revenues and overall sector health. A prompt price revision, it said, is essential to ensure feedstock parity, improve capacity utilisation and provide long-term policy certainty, enabling mills to clear farmer dues on time.
The industry added that timely and calibrated policy measures will be crucial to strengthen mill finances, safeguard farmer interests, stabilise domestic sugar markets and support India’s energy security and rural economy.
