Sugar Production as on March 31, 2026

Crushing season approaching its final phase ensuring comfortable sugar  availability

As of 31 March 2026 (SS 2025–26), sugar production reached 272.31 lakh tons, compared to 248.78 lakh tons on the corresponding date last year, i.e. around 9% higher. A total of 56 factories are currently operational, versus 95 mills operating at the same time last year.

Uttar Pradesh: The state has produced 87.5 lakh tons so far, similar to last year production. At present, 28 mills are operational, compared to 48 mills which operated last year on the corresponding date.

Maharashtra & Karnataka: Production has reached 99.3 lakh tons in Maharashtra and

47.90 lakh tons in Karnataka, compared to 80.26 lakh tons and 39.94 lakh tons, respectively, during the same period last year. Around 4 factories are currently operating across both states, against 7 operational mills during the corresponding period last season.

Notably, some mills in South Karnataka are expected to resume operations during the special season from June/July to September 2026. Additionally, some mills in Tamil Nadu will also continue their operations in the special season. Following table gives state-wise details of sugar production this year vis-à-vis last year:

As the sugar season enters its final phase, the industry is awaiting an early upward revision of the Minimum Selling Price (MSP). Rising production costs, coupled with inadequate ex-mill realizations, are exerting significant pressure on mill cash flows, resulting in an increase in cane payment arrears. As of mid-February, cane arrears have reached ₹16,087 crore, up from ₹14,038 crore last year. A timely MSP revision, aligned with current cost structures, is essential to restore mill viability, facilitate prompt farmer payments, and ensure market stability—without imposing any additional fiscal burden on the Government.

At the same time, evolving geopolitical dynamics and rising crude oil import prices underscore the need to accelerate ethanol blending. With an available production capacity of around 2000 crore litres (including grain sector), higher ethanol utilization can significantly reduce import dependence. The Government may consider fast-tracking a roadmap beyond E20 and move to E22, E25, E27 & E85/E100 through a calibrated, forward-looking policy framework, expedite roll out of FFVs capable to run on higher blends and rationalisation of GST on FFV vehicles for faster adoption.

Additionally, also ensuring appropriate ethanol pricing in line with rising cane costs which will help maintain parity across sugarcane-based feedstocks and provide long-term policy clarity to the sector. The ongoing LPG supply disruption has also led to reduced operations and temporary closures of several food outlets, resulting in lower sugar consumption thereby adding further pressure on the sugar industry.

 Addressing these issues through timely policy interventions will enable the sector to fully utilize its installed capacity, strengthen financial stability, protect farmer interests, stabilize sugar markets, and continue contributing meaningfully to India’s energy security and rural economic growth.