The Central government is most likely to come out with some decision in the next month to address the sugar industry’s concerns on rising glut due to surplus production that could translate into mounting sugarcane dues, Food Secretary Sanjeev Chopra said today.
The decisions could be related to the long-pending demand of the sugar sector on raising the minimum sale price (MSP) of sugar from the current ₹33 per kg to at least ₹41 per kg, pushing a higher percentage of ethanol produced from sugarcane from the existing 28 per cent, or even raising the quantum of exports from the current 1.5 million tonnes, Chopra said. The sugar season runs from October to September.
“See at present sugarcane arrears are not that big but what we have been told that in the next month and half it will start creeping and then the excess sugar production over consumption (in 2025-26 season) would start hurting the farmers which we don’t want and hence would do whatever we can to absorb the surplus,” Chopra told reporters on the sidelines of the annual general meeting of Indian Sugar and Bio-Energy Manufacturers Association (ISMA).
Chopra said with the current steps already in place, ISMA had estimated closing sugar stocks by the end of the 2025-26 season to be around 6 million tonnes and the government will do all things possible to bring it down so that farmers don’t suffer due to mounting arrears.
Later, the outgoing ISMA president Gautam Goel said that as per their preliminary estimates, as on November 30, sugarcane arrears have already touched around ₹2,000 crore in Maharashtra, while figures for Uttar Pradesh are still awaited as crushing started late there due to the extended monsoon.
Uttar Pradesh and Maharashtra account for more than 80 per cent of the total sugar produced in the country.
“The last time sugarcane dues crossed ₹20,000 crore by the end of the season was back in 2018-19 season when there was a global glut and domestic production was also big. A similar situation is developing in 2025-26 as well which is why we are asking the government to immediately raise the MSP of sugar as it will improve our liquidity and cash flow positions,” Goel said.
He said since the start of the 2025-26 sugarcane crushing season, ex-mill sugar prices have dropped from around ₹38.5-39 per kg to around ₹36.5 per kg, while in Uttar Pradesh it has fallen from ₹41-41.5 per kg to around ₹39.5 per kg.
Goel said exports, though allowed, are slow to get off because global markets are weaker than Indian sugar prices. “Since 2018-19, ethanol and higher diversion of sugar was insulating the industry, but this season that is also not available as only 28 per cent of the total requirement of ethanol has come to the sugar sector while the balance has gone towards grains,” he said.
Chopra, meanwhile, said that when it comes to production estimates for 2025-26, this is perhaps among a few rare instances when both industry and government believe that actual production after ethanol diversion would be somewhere around 34.3 million tonnes.
He also said that both the sugar industry and Indian Council of Agricultural Research (ICAR) should jointly work towards developing a Centre for Excellence or National Sugarcane Development Board that would work on developing varieties with higher yields and higher sugar recovery. “India’s average sugar recovery is around 10.5 per cent while China’s is around 13 per cent therefore we need to focus more on research and development,” Chopra said.
He said the government has also reached the final stages of framing more changes to the Sugarcane Control Order to replace the existing Act that was first passed in 1966.
