Sugar Fed welcomes FRP hike for 2025–26; updates on market trend
India’s cooperative sugar sector has lauded the Cabinet Committee on Economic Affairs’ decision to raise the Fair and Remunerative Price (FRP) of sugarcane to ₹355 per quintal for the 2025–26 season. Despite a projected national sugar production drop to 261 LMT, the move is seen as a timely support for farmers.
The cooperative sugar sector has welcomed the recent decision by the Cabinet Committee on Economic Affairs, chaired by Prime Minister Narendra Modi, to increase the Fair and Remunerative Price (FRP) of sugarcane to Rs 355 per quintal for the 2025–26 season based on a basic recovery rate of 10.25 percent. This marks a 4.41 percent hike over the current FRP and is seen as a timely move to support sugarcane farmers.
The National Federation of Cooperative Sugar Factories Ltd. (NFCSF), representing India’s farmer-owned cooperative mills, has applauded the decision as a reaffirmation of the government’s commitment to the welfare of sugarcane growers and the health of the overall sugar economy.
As of April 30, 2025, sugar mills across India have produced 256.95 lakh metric tonnes (LMT) of sugar from 534 operational units, a notable drop of 57.70 LMT from the previous year when production had reached 314.65 LMT.
Nineteen mills are still active, but the season has shown an overall contraction in output. In Uttar Pradesh, 122 mills participated in crushing, with 111 having concluded operations. The state crushed 948 lakh tonnes of cane at an average sugar recovery of 9.75 percent, yielding 92.45 LMT of sugar, with a final estimate of 92.50 LMT. In Maharashtra, 200 factories operated, with 199 now closed and one expected to finish by May 8.
The state crushed 852 lakh tonnes at 9.50 percent recovery, producing 80.95 LMT of sugar. Karnataka’s 79 mills have completed operations, processing 502 lakh tonnes of cane with 8.05 percent recovery, and total sugar output, including the special season, is projected at 42 LMT.
In Tamil Nadu, 23 out of 30 mills have completed operations after crushing 57 lakh tonnes at an 8.35 percent recovery rate. Including the special season, the state’s sugar production is estimated at 7 LMT.
Taking into account other producing states like Gujarat, Andhra Pradesh, Bihar, Punjab, Haryana, Telangana, Madhya Pradesh, and Uttarakhand, total national production is expected to settle at 261 LMT.
Ethanol diversion, which was initially targeted at 50 LMT of sugar equivalent, was reduced to 40 LMT by Oil Marketing Companies, but actual diversion is now forecast at only 32 LMT due to lack of ethanol price revisions. So far, about 29 LMT has been diverted. This shortfall is largely due to mills opting for sugar production instead, as it has become more profitable.
Currently, average ex-mill sugar prices are steady between Rs 3,880 and Rs 3,930 per quintal. The government’s earlier move to allow exports has improved liquidity, enabling mills to clear 99.92 percent of cane dues for 2023–24 and 87 percent (Rs 85,094 crore) of payments for 2024–25. Closing sugar stocks are estimated between 48–50 LMT, sufficient to meet domestic demand.
The industry has urged the government to revise the Minimum Selling Price (MSP) of sugar and raise ethanol procurement prices, especially for ethanol derived from sugarcane juice and B-heavy molasses, while continuing a supportive export policy for the upcoming season.
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Source : Indian Cooperative
