UP govt raises sugarcane SAP by ₹30 per quintal for 2025-26 season

Millers say the hike will raise costs and squeeze margins; opposition calls it inadequate, while the state claims the 8% rise will add Rs 3,000 crore to farmers' income

In one of the sharpest hikes in sugarcane state advised price (SAP) in the Yogi Adityanath regime, the Uttar Pradesh government on Wednesday announced ₹30 per quintal increase in the SAP of sugarcane for the 2025-26 season. The sugar season runs from October to September.

 

This surge will take the procurement price of the cash crop to ₹400 per quintal for early maturing varieties. For common varieties, the SAP will be ₹390 per quintal, up from ₹360 in the previous season. Uttar Pradesh is India's second largest sugar producer and home to largest number of private sugar mills in the country.

 

The increase, though beneficial to farmers, may squeeze the margins of sugar millers. It is expected to push up their cost of production from ₹41 per kg to almost ₹42-43.

 

The Indian Sugar and Bio-Energy Manufacturers Association (ISMA), which is the main representative of private sugar mills, welcomed the announcement.

 

But it urged the Centre to clear all pending issues that include raising the minimum sale price (MSP) from ₹32 to ₹40 per kg and also correcting the anomaly in ethanol allocation by oil marketing companies (OMCs).

 

“Or else, it would be very difficult for us to clear sugarcane arrears and make timely payment to farmers. Already sugar prices have started dropping in the last few weeks due to bumper production,” Deepak Ballani, director general of ISMA said.

 

Ballani, along with Madhav Shriram, managing director (MD) of DCM Shriram Industries Ltd, at a press conference on Wednesday, said that OMCs recently allocated the sugar sector just around 18 per cent of the total ethanol supplies in 2025-26. The balance was given to grains.

 

Such low supplies would mean that against an estimated diversion of 5 million tonnes of sugar in 2025-26, just around 3.4 million tonnes will be diverted. It would leave the industry with huge surplus sugar and mounting sugarcane dues.

 

The last time sugarcane SAP was increased more than the 2025-26 season was back in 2021-22. Then, it went up from ₹315 to ₹340 for common varieties while for early maturing varieties it was ₹350 per quintal. 

 

The more than 8 per cent price hike will translate into an additional income to sugarcane farmers worth ₹3,000 crore in the current crushing season, the state government claimed.

 

However, opposition Samajwadi Party termed the SAP hike as inadequate, saying that production cost of sugarcane has gone up at a much faster rate than the announced increase.

 

“Sugarcane price in UP is now linked to elections rather than input cost provided in the Sugarcane Act. The last time the state government increased the sugarcane SAP was back in 2023, ahead of the Lok Sabha elections. Since then, despite an increase in input cost due to the cost of human labour, pesticides and phosphate fertiliser rising by at least 15-20 per cent, SAP was kept unchanged. The current increase of 8.11 per cent, which has come ahead of the 2027 state polls, is therefore too little too late,” Sudhir Panwar, a former member of the UP Planning Commission said.

 

The calculation showed that in Shamli region of Uttar Pradesh, the average production cost of sugarcane in the 2025-26 season was around ₹416 per quintal. This means that the SAP announced was around ₹16 per quintal lower than that.

 

Along with paddy and wheat, sugarcane is a major cash crop of UP. Nearly 4.5 million farmer households are directly involved in its cultivation across the state.

 

Govt considering allowing sugar exports: Food secy

 

Food Secretary Sanjeev Chopra on Wednesday said that the government is considering allowing sugar exports in the 2025-26 marketing year.

 

This comes as surplus stocks accumulate due to lower-than-expected diversion of the sweetener for ethanol production.

 

The country's sugar mills diverted only 3.4 million tonnes of sugar for ethanol manufacturing in 2024-25, well below the projected 4.5 million tonnes, Chopra told PTI.

 

This has resulted in high opening stocks for the current 2025-26 marketing year that runs from October to September, he said.

 

Sugar production for 2025-26 is expected to reach 34 million tonnes against the annual domestic demand of 28.5 million tonnes, Chopra added.