India’s sugar sector has continued the 2025–26 season on a confident and encouraging note, supported by ample sugarcane availability, improved on-ground productivity, and enhanced operational efficiency across key producing states.
As on 31 December 2025, all-India sugar production has reached 118.97 lakh tonnes, marking a healthy growth of nearly 25% over the 95.40 lakh tonnes produced during the corresponding period last year. The industry has also seen a marginal rise in active participation, with 504 sugar mills currently in operation, compared to 492 mills at the same point in the previous season, according to the Indian Sugar & Bio-energy Manufacturers Association (ISMA) data.
Field-level reports from major sugarcane belts indicate better cane yields and improved sugar recovery rates as compared to last year, reflecting favourable agronomic conditions and more efficient crushing operations as the season gathers momentum.
State-wise performance of key states highlights the sector’s strong trajectory:
According to the ISMA, Uttar Pradesh has produced 35.86 lakh tonnes of sugar, registering an increase of 3.06 lakh tonnes (+9%) over last year by the end of December.
Maharashtra has delivered an exceptional performance maintaining a higher crush rate, with sugar production reaching 48.61 lakh tonnes, reflecting a remarkable increase of around 62% over the corresponding period last season. The state currently has 197 mills in operation, against 190 mills which were in operation on the corresponding date.
Karnataka has also reported accelerated crushing activity, with sugar production rising by around 12% compared to the same period last year.
As per ISMA key issues requiring policy attention
Despite the positive production outlook, certain structural challenges need urgent resolution to sustain sectoral health:
Ex-mill sugar prices in major producing states have declined significantly and are currently below the cost of production, averaging around ₹3,600 per quintal in Maharashtra and Karnataka. An immediate revision of the Minimum Selling Price (MSP) of sugar, aligned with rising production costs, is essential to restore financial viability, ensure timely cane payments to farmers, and stabilise the market—without imposing any additional fiscal burden on the Government.
Reduced ethanol allocations and the non-revision of ethanol procurement prices since 2022–23 have constrained distilleries’ ability to operate at optimal capacity, leading to operational inefficiencies and liquidity stress. A calibrated and forward-looking policy framework is required—one that aligns ethanol prices with increasing cane costs, ensures parity in ethanol allocations across sugarcane-based feedstocks, and provides a clear roadmap beyond the E20 blending programme.
Addressing these issues through timely policy interventions will enable the sector to fully leverage its installed capacity, ensure financial stability, safeguard farmer interests, stabilise sugar markets, and continue contributing significantly to India’s energy security and rural economic growth.
