Sugar supply situation ‘stable’ despite stocks at nine-year-low, says cooperative federation chief
India’s sugar outlook remains stable with sufficient supply to meet demand and exports. However, mills face rising losses as production costs exceed prices, increasing cane dues. Industry urges MSP revision and better ethanol pricing to restore viability, ensure timely farmer payments, and sustain long-term sugar production.
India’s sugar supply situation is “stable” for now, but the government must take steps to ensure the industry’s financial health and its ability to make timely payments to cane growers.
“The country’s sugar production in the 2025-26 season (October-September) is likely be around 281 lakh tonnes (lh) after factoring in an estimated 28 lt diversion towards ethanol manufacturing,” said Harshvardhan Patil, president of the National Federation of Cooperative Sugar Factories Ltd.
With opening stocks of 50 lt, the total sugar availability of 331 lt can comfortably cover the domestic consumption requirement of 280 lt and another 10 lt of exports for this season.
The projected closing stocks for 2025-26, at 41 lt, will be the lowest since the 39.4 lt of 2016-17, but that is still reasonably balanced, according to Patil.
He also discounted the effect of a possible El Niño on the sugarcane crop to be crushed in the ensuing 2026-27 season.
“The bulk of plantings for the next season were already completed last year, which had good rains. A below-normal monsoon due to an El Niño this year (as predicted by the private weather forecaster Skymet) would basically hit the 2027-28 cane crop,” Patil pointed out.
“The problem today is that the all-India average ex-mill price of sugar is about Rs 3,850 per quintal, while our cost of production is Rs 4,100 or so. We are incurring loss of Rs 250 for every quintal of sugar, affecting our liquidity and resulting in mounting cane dues to farmers,” he added.
The government must revise the minimum selling price (MSP) of sugar, which has been unchanged at Rs 31/kg since February 2019, to Rs 41 per kg. “The present MSP does not reflect the increase in cost, with the FRP (fair and remunerative price) of sugarcane alone going up from Rs 275 to Rs 355 per quintal between 2019-20 and the current season. A revision in MSP to Rs 41/kg will help improve sentiment and bridge the gap between cost and realisation,” Patil said.
Secondly, the ex-factory price of ethanol produced from B-heavy molasses and sugarcane juice/syrup has not been revised from Rs 60.73 and Rs 65.61 per litre since the 2022-23 supply year.
“Unless the viability of the sugar industry is guaranteed, it will be difficult to sustain payments to cane growers. That will make farmers lose interest in growing the crop and, in turn, impact sugar availability in India in the coming years,” he claimed.
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Source : The Indian Express
