India’s sugar production has increased by around 9% in the 2025–26 sugar season, reaching 272.31 lakh tonnes as of March 31, 2026, according to the Indian Sugar and Bio-Energy Manufacturers Association. During the same period last season, sugar output stood at 248.78 lakh tonnes, indicating a noticeable improvement in production across major sugar-producing regions.
However, despite the higher output, sugar mills are facing growing financial pressure. ISMA said rising production costs and relatively low ex-mill sugar prices have affected the financial health of mills. This situation has also led to delays in payments to sugarcane farmers, creating stress within the sector.
The industry body has therefore called for an increase in the Minimum Selling Price (MSP) of sugar. ISMA believes that revising the MSP in line with current cost structures would help improve the financial condition of mills and enable them to clear farmer dues more smoothly.
At the same time, the association highlighted the need to expand ethanol blending in petrol. Diverting more sugarcane towards ethanol production could help the industry manage surplus sugar while also supporting India’s energy security, especially at a time when global energy markets remain uncertain and crude oil import costs are rising.
ISMA also noted that changes in consumption patterns are affecting the market. In some areas, disruptions in LPG supply have impacted the operations of restaurants and food businesses, which has reduced sugar demand in certain segments.
Meanwhile, the number of operational sugar mills has declined as the crushing season nears its end. As of the end of March, 56 sugar mills were still operating, compared with 95 mills during the same period last year.
Among the major producing states, Uttar Pradesh recorded sugar production of about 87.5 lakh tonnes, which is largely similar to last year’s output.
ISMA emphasised that timely policy support from the government will be important to stabilise the sugar industry, protect farmer interests, and ensure sustainable growth in the sector.
