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Informist, Friday, Dec. 19, 2025

 

Afra Abubacker

 

NEW DELHI – Mills in Maharashtra have paid INR 70.26 billion as fair and remunerative price to sugarcane farmers as of Dec. 15, clearing nearly 73% of total dues, according to the Sugar Commissionerate data. The sugarcane payments are broadly normal with the early season trend, given that crushing operations started only in November, an official from the commissionerate said. 

 

As of November end, mills in Maharashtra crushed 24.8 million tonnes of sugarcane and had a gross fair and remunerative prices payable of INR 96.50 billion, including harvesting and transportation charges. With 73% of sugarcane dues cleared, mills in the state had arrears of INR 26.24 billion as of Dec. 15, according to data dated Dec. 17. Sugar mills are required to pay farmers government-fixed prices for sugarcane within two weeks of purchase.

 

On Thursday, sugar industry officials said sugarcane arrears in Maharashtra had built up to INR 20.00 billion as of Nov. 30, and warned that arrears are likely to rise in other states as well from mid-January when supplies peak and sugar prices weaken. "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, former president of the Indian Sugar & Bio-Energy Manufacturers Association. 

 

Food Secretary Sanjeev Chopra said sugarcane payments are currently good, but challenges may arise from mid-January as supply peaks and prices weaken. "We have taken that into account, and we will see in the next month or so, we will come out with certain decisions, which would assist the industry and also ensure the timely payment to farmers," Chopra said on the sidelines of ISMA's annual general meeting on Thursday.

 

According to industry bodies, mills are likely to face financial stress in the 2025-26 season (Oct-Sep) as higher sugarcane prices pushed up production costs. Meanwhile, sugar prices are likely to weaken further amid the forecast of surplus output and lower sugar diversion for ethanol production. "Whenever you have surplus sugar, sugar prices come down, which ultimately results in arrears," Goel said. "Sugar prices have already decreased from the start of the season, by about close to a rupee-and-a-half to two," he added.

 

Citing expectations of surplus output this year, ISMA officials also urged for favourable government policies to dispose of the excess stocks through higher exports and more diversion to ethanol.

Amid increased gross sugar production, ISMA expects the 2025-26 season to close with 6.0 million tonnes, after meeting domestic consumption needs, exports, and sugar diversion for ethanol output. Last year, the closing stock was 5.0 million tonnes. 

 

They also urged for an output cost-linked 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 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. "Aligning sugar MSP (minimum selling price) with the sugarcane FRP (fair and remunerative prices) is essential for the industry's sustainability and will greatly support timely payments to farmers," Goel said. 

 

On Maharashtra sugarcane arrears, G.K Sood, chairman of MEIR Commodities, said the arrears at the start of the current season appear to be moderate. "This is the characteristic of this seasonal industry. Mills operate for a few months and carry sugar for the whole year. They will gradually pay farmers. Sugarcane arrears start building toward February and peak around April, but then start reducing later in the season," he said.

 

Of the 184 operational mills in Maharashtra, 52 units have fully cleared sugarcane dues, while around 20 mills have paid 80-100%, and over 100 mills have paid less than 60% of dues as of Dec. 15, data showed. For the 2024-25 sugar season ended in September, mills had cleared more than 96% of cane payments to farmers, government officials had said in September. End

 

Edited by Deepshikha Bhardwaj

 

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