Uttar Pradesh : Despite robust cane crop, diversion to khandsari reduces sugar production
Uttar Pradesh’s sugar output has declined for four consecutive crushing seasons despite relatively strong sugarcane production, as less cane is reaching sugar mills. Rising diversion to khandsari and gur units, lower crushing volumes and fluctuating sugar recovery rates have contributed to tightening sugar supplies.
Lucknow: Even as sugar prices witness an upswing and cane production remains relatively strong, Uttar Pradesh has witnessed a steady fall in both sugarcane crushing and sugar output over the past four crushing seasons due to diversion to khandsari units, highlighting a widening gap between cane availability and the quantity reaching mills for sugar production.
Official data from the state cane development department show that sugar production has fallen continuously over the last four crushing seasons, even as cane production remained relatively robust.
The state’s sugar production declined from 104.82 lakh metric tonnes (LMT) in 2022-23 to 104.13 LMT in 2023-24, before dropping sharply to 92.45 LMT in 2024-25 and further to 89.52 LMT in 2025-26.
The cumulative decline of more than 14% over four seasons comes at a time when sugar mills and consumers alike are facing market pressure from tightening supplies.
What makes the trend notable is that the decline in sugar output is not matched by a proportionate fall in sugarcane production. Data show that UP produced 2,494 LMT of cane in 2023-24 and 2,456 LMT in 2024-25, significantly higher than those recorded during some of the state’s best sugar-producing years. Cane production, however, slipped to 2,362 LMT in 2025-26.
Data show that cane crushing fell from 1,098.82 LMT in 2022-23 to 981.68 LMT in 2023-24, followed by 956.09 LMT in 2024-25 and 878.12 LMT in 2025-26, underscoring a decline of more than 220 LMT in crushing volume over four years.
According to experts, while farmers continue to produce large quantities of cane, a smaller proportion of the crop is ultimately reaching sugar mills for crushing.
Experts believe that an increasing share appears to have been diverted to alternative uses, essentially ‘khandsari’ units, which have become increasingly attractive due to favourable returns.
Industry sources said that the diversion is estimated to have led to a loss of around 5 LMT of sugar. The industry has demanded that the state govt should permit crushing by local units at least a month after mills start operations in the forthcoming 2026-27 crushing season.
The numbers underline the extent of the shift. In 2019-20, when Uttar Pradesh achieved its highest-ever sugar production of 126.37 LMT, cane production stood at only 2,172 LMT, substantially lower than current levels. Yet the state recorded its highest cane crushing volume of 1,118.02 LMT, enabling mills to produce a record sugar output.
The comparison suggests that sugar production in Uttar Pradesh is now being influenced less by the size of the cane crop and more by how much of that crop is available to sugar mills.
Experts claimed that over the past few years, the Centre’s ethanol blending programme has emerged as a major driver of investment and operational decisions within the sugar sector.
Sugar mills have increasingly sought flexibility in directing cane juice and molasses towards ethanol production, while farmers in several cane-growing districts have found alternative markets through ‘gur’ and ‘khandsari’ units.
As a result, higher cane production no longer guarantees higher sugar output.
Another factor which has come to fluctuate the sugar recovery rates is the weather conditions, varietal composition and cane quality. A longer period of adverse weather, including erratic rainfall and temperature variations, is said to have impacted the sugar content in cane, reducing the amount of sugar extracted per tonne crushed.
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Source : The Times Of India
