India’s Sugar Output Falls Short of 280 Lakh Tonnes; UP Production Drops 3 Percent

India’s sugar production for the ongoing 2025–26 sugar season has largely concluded, with most mills completing crushing operations across the country. According to the Indian Sugar and Bio-Energy Manufacturers Association, sugar output (excluding ethanol diversion) reached 275.28 lakh tonnes as of April 30, marking an increase of around 7 percent compared to 256.49 lakh tonnes in the same period last year. However, the output remains significantly below initial estimates.

At present, only five sugar mills in Tamil Nadu are operational, while crushing has ended in 534 out of 539 mills nationwide. In comparison, 19 mills were still operating at this time last year.

Maharashtra emerged as the largest sugar-producing state this season, with output rising to 99.20 lakh tonnes from 80.93 lakh tonnes last year. However, this falls short of the early-season estimate of around 110 lakh tonnes, primarily due to adverse weather conditions affecting sugarcane crops.

The situation in Uttar Pradesh, the country’s largest sugarcane-producing state, is more challenging. Sugar production declined to 89.65 lakh tonnes from 92.4 lakh tonnes last year, a drop of about 2.75 lakh tonnes or nearly 3 percent. The decline was attributed to insufficient cane availability, although improved recovery rates helped limit the fall in output.

In Karnataka, sugar production increased significantly to 48.01 lakh tonnes from 40.4 lakh tonnes a year ago. Meanwhile, Gujarat recorded a decline in sugar output.

Industry Seeks Higher Sugar MSP

The sugar industry has reiterated its demand for a revision in the Minimum Selling Price (MSP) of sugar, citing rising production costs and relatively low market prices. These factors have put pressure on mill cash flows and led to an increase in pending cane payments.

In Maharashtra alone, cane payment arrears stood at around Rs 2,130 crore by mid-April, significantly higher than Rs 752 crore recorded during the same period last season. Industry stakeholders argue that an increase in MSP is essential to improve mill finances and ensure timely payments to farmers, without imposing any additional financial burden on the government.

Call to Accelerate Ethanol Blending

The industry has also stressed the need to accelerate ethanol blending in light of rising crude oil prices and evolving geopolitical conditions. With an estimated production capacity of around 20 billion litres of ethanol, including grain-based output, there is a strong case for moving beyond the current E20 programme towards higher blends such as E22, E25, E27 and E85/E100.

Concerns have also been raised over the underutilization of installed distillation capacity due to delays in revising procurement prices for cane-based ethanol and limited allocation to the sector. The industry has urged the government to ensure parity across feedstocks, improve capacity utilization and revise ethanol prices promptly to provide policy certainty and enable mills to clear cane dues promptly.

Timely policy interventions, the industry noted, will be critical to strengthening mill finances, safeguarding farmer interests, stabilizing the domestic sugar market and supporting India’s energy security and rural economy.

Sugar production

Source: ISMA (Note: Above sugar production figures are after diversion of sugar into ethanol)