India’s sugar industry, which has spent the past decade transforming itself from a cyclical commodity sector into a diversified industry linked to ethanol production, is now facing growing pressure from several challenges. According to Praful Vithalani, Founder Chairman of the All India Sugar Trade Association (AISTA), recent policy changes and global developments are putting sugar mills in a difficult position.
Over the years, government policies encouraged sugar mills to diversify into ethanol production, helping the sector reduce its dependence on sugar prices and stabilise revenues. However, a combination of policy shifts, stagnant price support and global energy market disruptions is now threatening to slow down this progress.
The situation is particularly difficult for cooperative sugar mills in Maharashtra, which are reportedly facing the greatest financial pressure.
According to Vithalani, the industry is currently dealing with what he describes as a “five-way squeeze”, where rising costs, limited price revisions and policy uncertainties are putting pressure on the sector’s financial stability. If the situation continues, it could also affect sugarcane farmers.
He warned that farmers might start shifting away from sugarcane cultivation to other profitable crops if mills struggle to maintain stable payments. Such a shift could create supply challenges in the future.
Vithalani also emphasised that India has traditionally been a major sugar exporter, and maintaining that position remains important for the industry. While there are export opportunities in the global market, sugar mills will need stronger financial stability to fully benefit from international demand.
He added that ensuring a balanced policy environment and stable industry finances will be crucial to prevent the sector from slipping back into the old cycle of surplus production, price crashes and financial stress that it faced in the past.
