Sugar production 22% high; concern over rising cane prices: ISMA
India’s sugar sector has made steady progress so far in the 2025–26 season, supported by adequate sugarcane availability, improved field-level productivity, and smoother operations across major producing regions. Rising cane prices poses financial challenge for the industry.
- Jan 20, 2026,
- Updated Jan 20, 2026 2:22 PM IST
All-India sugar production has reached 159.09 lakh tonnes as of Jan 15, a 22% increase over the same period last year, but the industry expressed concern over mounting operational and cash-flow stress due to the continued mismatch between cane prices and sugar realisations.
The jump is also due to the number of operational sugar mills having edged up slightly, with 518 mills currently crushing, compared to 500 mills at the corresponding stage of the previous season, according to the Indian Sugar & Bio-Energy Manufacturers Association (ISMA).
The association called for an early revision of the Minimum Selling Price (MSP) of sugar, aligned with rising production costs, saying it would be critical to restoring financial viability, ensuring timely cane payments to farmers, and maintaining market stability—without imposing any additional fiscal burden on the Government.
Uttar Pradesh, Karnataka, Uttarakhand, Punjab, Haryana and Bihar have raised the Agreed cane price by Rs 15 per quintal to Rs. 380 per quintal (For early variety).
“While these revisions support farmers, the widening gap between rising cane and sugar production costs and declining ex-mill sugar realizations is placing increasing pressure on mill finances and cane payment cycles. At present, ex-mill sugar prices in Maharashtra and Karnataka have further declined to around Rs 3,550 per quintal, which is significantly below the current cost of production of sugar,” said ISMA.
As the season advances and sugar inventories continue to build, indications suggest that cane payment arrears have begun to increase and may rise further if the current market conditions persist, it added. Outlook
Overall, the season so far reflects stable operational progress and a cautiously optimistic outlook for the industry. Uttar Pradesh has produced 46.05 lakh tonnes of sugar, reflecting an increase of 3.23 lakh tonnes (around 8%) over the last year by the mid of January. Karnataka has also recorded improved crushing momentum, with sugar production rising by about 13% compared to the corresponding period of the previous season.
Maharashtra has reported a higher crushing rate this season, with sugar production reaching 64.50 lakh tonnes, representing a substantial improvement of approximately 51% over the same period last season. The state currently has 204 mills in operation, compared to 196 mills at the same time last year.
All-India sugar production has reached 159.09 lakh tonnes as of Jan 15, a 22% increase over the same period last year, but the industry expressed concern over mounting operational and cash-flow stress due to the continued mismatch between cane prices and sugar realisations.
The jump is also due to the number of operational sugar mills having edged up slightly, with 518 mills currently crushing, compared to 500 mills at the corresponding stage of the previous season, according to the Indian Sugar & Bio-Energy Manufacturers Association (ISMA).
The association called for an early revision of the Minimum Selling Price (MSP) of sugar, aligned with rising production costs, saying it would be critical to restoring financial viability, ensuring timely cane payments to farmers, and maintaining market stability—without imposing any additional fiscal burden on the Government.
Uttar Pradesh, Karnataka, Uttarakhand, Punjab, Haryana and Bihar have raised the Agreed cane price by Rs 15 per quintal to Rs. 380 per quintal (For early variety).
“While these revisions support farmers, the widening gap between rising cane and sugar production costs and declining ex-mill sugar realizations is placing increasing pressure on mill finances and cane payment cycles. At present, ex-mill sugar prices in Maharashtra and Karnataka have further declined to around Rs 3,550 per quintal, which is significantly below the current cost of production of sugar,” said ISMA.
As the season advances and sugar inventories continue to build, indications suggest that cane payment arrears have begun to increase and may rise further if the current market conditions persist, it added. Outlook
Overall, the season so far reflects stable operational progress and a cautiously optimistic outlook for the industry. Uttar Pradesh has produced 46.05 lakh tonnes of sugar, reflecting an increase of 3.23 lakh tonnes (around 8%) over the last year by the mid of January. Karnataka has also recorded improved crushing momentum, with sugar production rising by about 13% compared to the corresponding period of the previous season.
Maharashtra has reported a higher crushing rate this season, with sugar production reaching 64.50 lakh tonnes, representing a substantial improvement of approximately 51% over the same period last season. The state currently has 204 mills in operation, compared to 196 mills at the same time last year.