India’s ongoing 2025-26 sugar crushing season has begun witnessing early mill closures, signalling a challenging year for the industry. According to the Indian Sugar Mills Association (ISMA), 78 sugar mills had stopped crushing operations by 15 February, compared with 72 mills during the same period last year. The previous season had already been weak in terms of production, and the current outlook appears more strained.
Sugar mills are facing cane supply constraints along with stiff competition from kolhu (traditional crushers) and khandsari units in Uttar Pradesh. In Uttar Pradesh, nine sugar mills had closed by 15 February, while two mills did not commence operations at all this season. Several more mills are likely to suspend crushing by the end of February due to inadequate cane availability.
A decline in cane yields in Uttar Pradesh and early flowering in Maharashtra are expected to weigh on overall sugar production. However, total sugar output as of 15 February stood at 22.5 million tonnes, higher than 19.7 million tonnes produced during the same period last year. Industry observers note that crushing had started late in Maharashtra last year due to elections, which had depressed early output figures.
At the start of the season, ISMA had projected sugar production for 2025-26 at around 34.9 million tonnes. Industry sources now estimate output may fall to about 29 million tonnes given the prevailing conditions after diverting an estimated 3.4 million tonnes of sugar for ethanol production. With the diversion gross sugar production could stand at roughly 32.5 million tonnes.
In Uttar Pradesh, the country’s largest sugarcane producing state, sugar output reached about 6.6 million tonnes by 15 February, marginally higher than 6.4 million tonnes recorded in the corresponding period last year. Recovery rates, however, have improved compared with the previous season.
Data from the National Federation of Cooperative Sugar Factories Limited show that mills in Uttar Pradesh crushed 66.2 million tonnes of cane up to 14 February, compared with 68 million tonnes during the same period last year, a decline of nearly 1.8 million tonnes. Mills are attempting to procure as much cane as possible, but supplies remain tight.
Sugarcane farmers in Uttar Pradesh have been grappling with disease incidence and declining yields in recent years, affecting cane availability. Meanwhile, gur and khandsari units are offering higher prices, intensifying competition for cane procurement.
Manjit Singh, a kolhu operator from Nangalsoti village in Bijnor district of Uttar Pradesh, told Rural Voice that crushers are paying Rs 430 to Rs 440 per quintal for sugarcane this season. Gur prices are ranging between Rs 45 and Rs 50 per kg. Prompt cash payments and better rates are prompting many farmers to supply sugarcane to kolhu and khandsari units instead of sugar mills.
Given the current scenario, industry sources feel that most sugar mills in Uttar Pradesh may halt crushing by the end of March. In a normal year, crushing operations in the state continue until May.