Centre to decide on sugar exports, higher ethanol quota next month and half

Maharashtra's sugarcane arrears stood at ₹2,000 crore till November 30, 2025

The Centre is most likely to come out with some decisions next month to address the sugar industry’s concerns on rising glut due to surplus production that could lead to mounting sugarcane dues, food secretary Sanjeev Chopra said on Thursday.

 

The decisions could be related to the long-pending demands of the sugar sector for hiking the minimum sale price (MSP) of sugar from the current ₹33 per kg to at least ₹41 per kg, raising the share of ethanol produced from sugarcane from the existing 28 per cent to 50 per cent, and increasing the quantum of exports from the current 1.5 million tonnes (mt), 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 is that in the next month and half, the arrears will start creeping, and then the excess sugar production over consumption (in 2025-26 season) would start hurting the farmers, something that 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 (AGM) of Indian Sugar and Bio-Energy Manufacturers Association (Isma).

 

Chopra said with the steps already in place, Isma had estimated that closing sugar stocks by the end of 2025-26 season would be around 6 mt, and the government will do all things possible to bring it down so that farmers don’t suffer due to mounting arrears.

 

Later, 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 (UP) are still awaited as crushing started late there due to extended monsoon.

 

UP 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 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 2025-26 sugarcane crushing season, ex-mill sugar prices have dropped from around ₹38.5-39 per kg to around ₹36.5 per kg in Maharashtra while in UP it has slid 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 mt.

 

He also said that both the sugar industry and Indian Council of Agriculture 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 added.

 

He said the government has also reached the final stages of bringing in more changes to the Sugarcane Control Order to replace the existing Act that was first passed in 1966.