Maharashtra sugar sector under strain despite higher output
Maharashtra’s sugar industry faces stress despite higher output, as early mill closures, unseasonal rains, and West Asia tensions hit exports. With rising costs, low ethanol utilisation, and unchanged sugar MSP, mills face losses and pending dues, while drought fears threaten next season and farmer livelihoods.
Mumbai: Despite increase in sugar output this season, sugar industry in Maharashtra is grappling under pressure due to several reasons, The Indian Express reported.
One of the key concerns this year has been the early closure of sugar mills. Most mills stopped operations by mid-March, cutting the crushing season to nearly 100 days compared to the usual 160 days. This shorter duration has affected the full use of existing capacity and infrastructure.
Industry sources say multiple factors led to this situation. The ongoing tensions in West Asia have impacted sugar exports to Gulf markets. At the same time, unseasonal rainfall during November and December damaged a large portion of standing sugarcane, reducing the availability of cane and forcing mills to shut earlier than expected.
Despite these issues, overall production has risen. Data from the state’s cooperative department shows that in the 2025-26 season, about 1042.88 lakh metric tonnes of cane were crushed, producing 988.38 lakh quintals of sugar. This is higher than 2024-25, when 791.15 lakh quintals were produced from 853.96 lakh metric tonnes of cane, but still below the 2023-24 season’s output of over 1101 lakh quintals.
Looking ahead, concerns are building over the next season. Chief Minister Devendra Fadnavis has warned of a possible drought-like situation in 2026-27 due to the expected impact of El Niño on monsoon rains. The state has announced plans for water conservation, including measures under the Jalyukta Shivar Abhiyan.
Officials say that if drought conditions worsen, there may be a need to discourage sugarcane cultivation, given its high water use. Agricultural institutions are being involved to guide farmers towards alternative crops such as millets and pulses, especially in drought-prone regions like Vidarbha and Marathwada.
The industry has also placed several demands before the government. These include a subsidy of Rs 500 per tonne of sugar and restructuring of loans worth Rs 8,000 crore, with a two-year pause on repayments and an extended repayment period. There is also a demand to increase the quota for sugar-based ethanol, which is currently limited to 30%.
On ethanol, mill operators say that while investments have been made, capacity use remains low. Against an installed capacity of 424 crore litres, only 116 crore litres have been allocated, leading to utilisation of about 27%. They also point out that ethanol prices from sugar have remained between Rs 67 and Rs 71 per litre, while maize-based ethanol prices have risen to Rs 71.86 per litre.
Another major concern is pricing. While the Fair Remunerative Price (FRP) for sugarcane has increased significantly over the years—from Rs 2,750 per tonne in 2018-19 to Rs 3,550 per tonne in 2025-26—the Minimum Selling Price (MSP) of sugar has remained unchanged at Rs 31 per kg. The industry is seeking an increase in MSP to Rs 41 per kg to ease financial pressure.
The impact of these challenges is already visible. Early closure of mills is estimated to have caused losses of around Rs 3,300 crore. At the same time, payments worth Rs 4,315 crore to farmers are still pending.
The sugar sector remains a crucial part of Maharashtra’s economy, supporting nearly 50 lakh farmers, 1.5 lakh cane workers and over two lakh mill employees. With a turnover of Rs 55,000 to Rs 60,000 crore and contributing about Rs 8,000 crore in government revenue, the sector’s stability is seen as vital for the state’s rural economy.
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Source : Chinimandi
