India's Sugar Output Climbs 8% to 274.8 Lakh Tons This Season

In an official statement, ISMA said that while production has risen, the number of operational mills has declined significantly. A total of 19 factories are currently operational, compared to 38 mills operating at the same time last year, indicating that the crushing season is nearing its end.

State-wise, Uttar Pradesh has produced 89.26 lakh tons so far, slightly lower than 91.10 lakh tons recorded in the corresponding period last year. At present, only 6 mills remain operational in the state, compared to 22 mills last year.

In contrast, Maharashtra and Karnataka have recorded higher production. Maharashtra's sugar output has reached 99.3 lakh tons, up from 80.88 lakh tons last year, while Karnataka produced 48.10 lakh tons compared to 40.40 lakh tons in the same period a year ago. All factories in both states have now closed operations for the main season. However, some mills in Karnataka are expected to resume operations during the special season starting June or July 2026. Similarly, a few mills in Tamil Nadu will continue operations during the special season.

As the season approaches closure, the industry has sought an early revision of the Minimum Selling Price (MSP), citing rising production costs and weak ex-mill realisations. ISMA noted that these factors are putting pressure on mill cash flows and leading to an increase in cane payment arrears. The industry has emphasised that a timely MSP revision aligned with current cost structures is necessary to ensure financial stability and enable timely payments to farmers.

The association also highlighted the need to accelerate ethanol blending amid rising crude oil prices and evolving geopolitical conditions. With an estimated production capacity of around 2000 crore litres, including grain-based ethanol, it suggested that the government may consider moving beyond E20 towards higher blends such as E22, E25, E27 and E85/E100, along with faster rollout of flex-fuel vehicles and GST rationalisation.

Further, ISMA pointed out that the lack of revision in ethanol procurement prices and lower allocation to the sector have resulted in underutilised distillation capacity and inventory build-up.

It also noted that ongoing LPG supply disruptions have impacted food outlet operations, affecting sugar consumption and adding to industry pressures.

The association said that timely policy measures will be crucial to optimise capacity utilisation, improve financial health of mills, protect farmer interests, stabilise sugar markets and support India's energy security and rural economy.

- ANI