The current sugar supply landscape in India is described as “stable,” yet it is essential for the government to implement measures that safeguard the financial well-being of the industry and ensure timely payments to sugarcane farmers.
According to Harshvardhan Patil, president of the National Federation of Cooperative Sugar Factories Ltd, sugar production for the 2025-26 season (spanning October to September) is projected to reach approximately 281 lakh tonnes (lh), taking into account an anticipated diversion of 28 lakh tonnes towards ethanol production.
With an initial stock of 50 lakh tonnes, the total sugar availability is estimated at 331 lakh tonnes, which should adequately meet the domestic consumption needs of 280 lakh tonnes and allow for an additional 10 lakh tonnes for export this season.
The anticipated closing stocks for the 2025-26 season are expected to be around 41 lakh tonnes, marking the lowest level since the 39.4 lakh tonnes recorded in 2016-17. However, Patil considers this figure to be reasonably balanced.
Patil also addressed concerns regarding the potential impact of an El Niño event on the upcoming sugarcane harvest for the 2026-27 season, suggesting that the majority of the planting for that season had already been completed last year, which benefited from favorable rainfall. He noted that any adverse effects from a predicted below-normal monsoon due to El Niño would primarily affect the 2027-28 cane crop.
Currently, the average ex-mill price of sugar across India stands at approximately Rs 3,850 per quintal, whereas the production cost is around Rs 4,100. This discrepancy results in a loss of Rs 250 for each quintal of sugar produced, which is impacting liquidity and leading to increased cane dues owed to farmers.
Patil emphasized the need for the government to adjust the minimum selling price (MSP) of sugar, which has remained stagnant at Rs 31 per kilogram since February 2019, advocating for an increase to Rs 41 per kilogram. He argued that the current MSP fails to account for rising production costs, noting that the fair and remunerative price (FRP) of sugarcane has escalated from Rs 275 to Rs 355 per quintal since the 2019-20 season. A revised MSP would not only enhance market sentiment but also help close the gap between production costs and revenue.
Furthermore, he pointed out that the ex-factory prices of ethanol produced from B-heavy molasses and sugarcane juice/syrup have not been updated since the 2022-23 supply year, remaining at Rs 60.73 and Rs 65.61 per litre, respectively.
Patil warned that without ensuring the viability of the sugar industry, sustaining payments to cane growers would become increasingly difficult. This situation could lead to farmers losing interest in cultivating sugarcane, thereby adversely affecting sugar availability in India in the future.
