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Informist, Tuesday, Sept. 30, 2025

 

--Govt officials: No proposal so far to hike sugar minimum selling price

--Govt officials: No need to up sugar minimum sale price, ex-mill rates good

--Govt officials: To allow sugar exports for 2025-26 if domestic prices fall

 

By Afra Abubacker and Pallavi Singhal

 

NEW DELHI – The government is not considering hiking the minimum selling price of sugar as current ex-mill prices are remunerative, two senior government officials told Informist. The industry has been seeking a hike in the minimum selling price, citing rising sugarcane costs. For the upcoming sugar season starting Oct. 1, mills have to pay sugarcane farmers 4.4% more than last year as the government hiked the fair and remunerative price of cane to INR 355 per 100 kilograms from INR 340.

 

Last year, mills clamoured for a higher minimum selling price as surplus production outlook and high carry-forward stocks depressed sugar rates. "The industry is demanding this year as well. As of today, there is no proposal to hike sugar MSP (minimum selling price). And that has been the case since January," one of the officials said. In January, the government opened sugar exports, which improved domestic sugar prices.  

 

Sugar prices were subdued for most part of the second half of 2024 and fell to around INR 3,500-3,600 per 100 kg in Maharashtra in Nov-Dec. The government had been discussing raising the minimum selling price of sugar since June last year and had even proposed to hike it to INR 35.5 per kg. However, the proposal got stalled after being rejected at higher levels, according to industry experts. Currently, the minimum selling price of sugar is INR 31 per kg, unchanged since February 2019.

 

Unlike last year, higher carry-forward stocks are not weighing on current sugar prices. The 2024-25 sugar season is likely to close with 5 million tonnes, lower than 8 million tonnes in 2023-24. 

 

The official said the current ex-mill prices are aligned with production costs. Currently, ex-mill prices of sugar are around INR 4,000 per 100 kg in key markets of both Uttar Pradesh and Maharashtra. Industry associations estimate mills to have spent INR 4,166 to produce 100 kg of sugar in 2024-25. "We (Indian Sugar and Bio-energy Manufacturers Association and National Federation of Cooperative Sugar Factories) arrived at INR 41.66 per kg after considering the production cost of highly efficient and inefficient mills. The numbers are realistic and factual," ISMA Director General Deepak Ballani had told Informist earlier. 

 

The industry has stressed that the financial strength of mills is essential to ensure timely payments to farmers. According to officials, sugar mills have cleared 96?ne dues, amounting to INR 980 billion in the current season ending Sept. 30. "By the second week of October, we will get updated information on cane payments," the official said. 

 

As of Friday, farmers have sown sugarcane across 5.9 million hectares, up 3.2% on year, amid a hike in fair prices of cane and favourable weather conditions. Cane crushing operations for the 2025-26 season are expected to begin after Diwali late October.

 

Meanwhile, ISMA projects gross sugar output in 2025-26 to rise over 18% on year to 34.9 million tonnes, driven by higher acreage and improved yields. The outlook of abundant supply, coupled with uncertainty over export policy, has fuelled fears of a likely fall in domestic prices.

 

Though government officials indicated there is a scope for exports, they have not detailed the likely quantity or timing. "If at all prices fall on the back of higher supplies, an export quota will rather be given (for 2025-26)," a government official said. 

 

For 2024-25, the government allowed mills to export 1 million tonne sugar by September, of which some 750,000 tonnes were shipped. India exported less sugar than the quota because global prices were not attractive. "We humbly request the government to permit export of 2 million tonnes of sugar in 2025–26, with an early policy announcement, so that mills can contract forward, secure better prices, plan their production, and maintain market balance," ISMA President Gautam Goel said at a conference earlier this month. 

 

The government had introduced the minimum selling price mechanism in 2018 to support sugar prices during times of supply glut. But with the ethanol blending programme offering mills an alternative outlet, much of the surplus sugar has been diverted for biofuel production. However, industry sentiments have been weak as the procurement prices for ethanol produced from sugarcane feedstock remain mostly unchanged since 2022-23.  End

 

Edited by Akul Nishant Akhoury

 

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