ISMA seeks MSP hike as rising costs and mounting inventories tighten cash flows

ISMA, in its sugar production report, said that as of February 15, 2026, sugar production has reached 225.06 lac tons, against 197.35 lac tons produced last year on the corresponding date. The number of operating factories was 456 this year, down from 460 on the corresponding date last year.

Uttar Pradesh has produced 66.27 lakh tons of sugar so far, marking an increase of 2.23 lakh tons (around 3%) over last year by mid of February. The state currently has 111 mills in operation, compared to 119 mills at the same time last year.

In Maharashtra and Karnataka, the total sugar production has reached 89.72 lac tons and 40.65 lac tons, respectively, higher than 68.22 lac tons and 35.80 lac tons produced last year, as of mid- Feb.

About 55 factories have collectively closed across both states so far, compared to 58 closures during the same period last year. It is worth noting that some factories in South Karnataka are expected to restart operations during the special season from June / July to September 2026.

The following table gives state-wise details of sugar production this year vis-à-vis last year:

YTD 15th Feb’2026                     15th Feb’2025
Number of Factories Number of Factories
ZONE  

Started

 

Closed

 

Operating

Sugar Production (Lac Tons)  

Started

 

Closed

 

Operating

Sugar Production (Lac Tons)
U.P. 120 9 111 66.27 122 3 119 64.04
Maharashtra 208 26 182 89.72 200 30 170 68.22
Karnataka 81 29 52 40.65 78 28 50 35.80
Gujarat 14 2 12 5.80 15 1 14 5.99
Tamil Nadu 30 3 27 2.72 30 4 26 2.34
Others 81 9 72 19.90 87 6 81 20.96
ALL INDIA 534 78 456 225.06 532 72 460 197.35

 

 (Note: The above sugar production figures are after diversion of sugar into ethanol)

The Association said that it has procured satellite images of standing crop across the country, thereby giving a fair idea of the remaining harvestable cane area. Based on the detailed analysis of field conditions, satellite data, estimated yield and recovery so far, and expected yield and recovery for the balance season, ISMA will shortly release its Third Advance Estimate of sugar production for the current season 2025-26.

As the sugar season progresses and inventories continue to build up, the industry remains in anticipation of an early upward revision of the Minimum Selling Price (MSP) of sugar.

ISMA said that with production costs rising and ex-mill realisations not keeping pace, the widening gap has intensified cash-flow pressures across mills, contributing to an upward trend in cane payment arrears. A timely upward revision of MSP, aligned with current cost structures, would be instrumental in restoring financial viability, enabling mills to clear farmers’ dues promptly, and ensuring overall market stability—without entailing any additional fiscal burden on the Government.

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