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Informist, Thursday, Dec. 18, 2025

 

--ISMA head: Cane arrears starting to build up in Maharashtra 

--ISMA head: Cane arrears in Maharashtra around INR 20 bln as of Nov 30 

--ISMA head: Cane arrears in 2025-26 may mount similar to that in 2018-19 

--ISMA head: Cane arrears in 2018-19 were around INR 200 bln

NEW DELHI – The Indian sugar industry has warned about a build-up in sugarcane arrears in the 2025-26 (Oct-Sep) season, as higher sugarcane prices will financially stress mills that are already facing surplus output, weak sugar prices, and lower sugar diversion for ethanol.

 

"We have already begun to see financial stresses in at least the Maharashtra region. We are beginning to notice a buildup in cane arrears," said Gautam Goel, the president of the Indian Sugar & Bio-Energy Manufacturers Association. As of Nov. 30, the state's sugarcane arrears were INR 20 billion, he said, adding that the arrears are likely to build-up in other states as well from mid-January when supplies peak.

 

Sugar mills are required to pay farmers government-fixed prices for sugarcane within two weeks of purchase. The average sugarcane price this season has risen to around INR 390 per 100 kilograms as states including Uttar Pradesh, Punjab, and Haryana increased the state-advised prices for sugarcane, according to ISMA. This is well above the Centre-fixed fair and remunerative price of INR 355 per 100 kg.

 

Moreover, falling sugar prices reduce a mill's ability to secure loans, as bank takes sugar stocks as collateral. "Whenever you have surplus sugar, sugar prices come down, which ultimately results in arrears," Goel said in a press conference after ISMA's annual general meeting on Thursday. "Sugar prices have already decreased from the start of the season, by about close to a rupee-and-a-half to two," he added.

 

If the government does not take corrective measures to dispose the surplus sugar, sugarcane arrears will pile up in the 2025-26 season as was seen in 2018-19. That season, sugarcane arrears had mounted to INR 200 billion, which led to farmer agitations, which prompted the government to increase the minimum selling price of sugar to INR 31 per kg from INR 29 per kg in February 2019. To support the sugar industry, the government also had to spend INR 30 billion as subsidies for exports.

 

"After 2018-19, this is the first season again the same situation is arising that we have a global surplus," Goel said. He added that revising the minimum sale price will have a negligible impact on inflation, as sugar has a low weight in the CPI index. The industry has been urging for an upward revision in the minimum selling price of sugar from INR 31 per kg, by linking the average cost of production at INR 41.66 per kg.

 

The industry has committed to about 150,000 tonnes of sugar exports so far in the season, Goel said. The government has allowed mills to export 1.5 million tonnes by September. "We also request that sugar exports be included in bilateral discussions and FTAs (free trade agreements) with countries such as Japan, African nations, Afghanistan, China, and Southeast Asian countries, including Indonesia and Malaysia," Goel said.  End

 

Reported by Afra Abubacker

Edited by Ashish Shirke

 

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