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Informist, Tuesday, Feb. 10, 2026

 

By Taniva Singha Roy

 

MUMBAI - Amid deficient sugarcane output in Uttar Pradesh and diversion for production of other sweeteners, a few mills have put a halt to crushing operations for the first time in January, which is way ahead of normal closing time. However, due to a better recovery rate, sugar production in Oct-Sept 2026 is expected to be on a par with that of a year ago.

 

A few mills in the state have halted crushing as early as January end and early February due to low cane availability and diversion to khandsari and jaggery units, market participants said. As on Jan. 31, there were 118 operational mills in the state, lower than 122 mills operating at the same time last year. Additionally, a few smaller mills, too, are reported to have shut their operations for the season.

 

One of the large mills operated by the Bajaj Group, a major producer, shut its crushing operations on Jan. 27 because of limited cane availability. Sugarcane crushing in India typically ends between late March and early April, marking the conclusion of the 140– to 150-day season that generally starts in November.

 

There has been a fall in the availability of sugarcane in some parts of Uttar Pradesh such as Bareilly, Mahmudabaad, Muzzaffarnagar and a few more, due to a drop in ratoon yield by 15–20%, said Shadab Aslam, managing director at Kisaan Sahkari Chini Mills Ltd., in Bareilly. A ratoon is the regrowth from a previous harvest. It is a crop produced from the stubble of a previously harvested crop. Farmers have also reported reduced yields of around 10% in plant crops in some areas, he said.

 

According to the state-wise details provided by the National Federation of Cooperative Sugar Factories Ltd., sugarcane crushing in Uttar Pradesh fell to 55.9 million tonnes from 57.9 million tonnes a year ago, as of Jan 31. In Uttar Pradesh, area under sugarcane is seen declining to 2.26 million hectares from 2.33 million hectares for the current 2025-26 sugar season.

 

Additionally, many farmers have opted to sell their sugarcane to local khandsari and jaggery producers and not sugar mills due to delayed payments by the latter, said Vinod Kumar Jain, former executive director at Deccan Group of Sugar. "Due to a low minimum selling price, mills are facing a liquidity issue and are unable to pay farmers on time," Jain said. For the current sugar season, the government has increased the mandated price for sugarcane to INR 355 per 100 kg on Oct. 1, while the sugar minimum support price has remained stagnant at INR 31 per kg since February 2019, creating a massive gap between production costs and sales revenue.   

 

SUGAR OUTPUT UNAFFECTED

 

Several reasons contributed to a few mills in the state shutting earlier than the usual time. "However, despite the crunch in sugarcane availability, impact in sugar production might be negligible due to better recovery rates," Aslam said. Sugar production in the state was 5.5 million tonnes as of Jan. 31, up from 5.3 million tonnes at the same time last year, according to National Federation of Cooperative Sugar Factories Ltd.

 

Sugarcane production is less than required, but a good recovery rate and sluggish export demand will leave enough to meet domestic requirement, said Naresh Gupta, a trader from north India. The average sugar recovery rose to 9.9% from 9.1% last year, according to data by the sugar federation. Due to planting of improved, high-sucrose cane varieties, the recovery rate is higher, traders said.

 

The sugarcane availability and sugar production figures will be clearer at the end of this month when trade bodies come out with crushing reports, he said. Gupta added that due to subdued export demand, there will be enough availability of the sweetener to meet the domestic demand even if there is low supply of sugarcane.

 

India's sugar production in the ongoing 2025-26 (Oct-Sept) season rose over 18% on year to 19.50 million tonnes as of Jan. 31, the Indian Sugar & Bio-Energy Manufacturers Association said. "Production levels so far reflect the combined impact of regional variations in cane availability, field conditions, and mill operations," the association said.

 

Sugar output in Uttar Pradesh was higher despite a slight decline in operational mills, ISMA said.

 

"As the season advances and sugar inventories continue to build, indications suggest that cane payment arrears have begun to show an upward trend," the association said. The sugar industry continues to face operational and cash-flow pressures due to a mismatch between the cost of sugar production and sugar realisations, it said.

 

PRICE IMPACT

 

Prices have already risen by around INR 100 per 100 kg in February from the lower levels due to factors such as anticipation of a minimum selling price hike, and concerns of fall in sugarcane output. However, prices are unlikely to increase any further, Gupta said.

 

Currently, sugar prices in the key markets of Uttar Pradesh are in the range of INR 3,910-INR 4,130 per 100 kg, higher than INR 3,770-INR 3,940 per 100 kg a month ago.

 

Prices are unlikely to increase much as despite a fall in sugarcane output, sugar production is higher, Aslam said. "And the elections are right around the corner, so government will not let prices rise," he added.

 

In addition, due to subdued export demand, there will be ample availability, which will put a cap on rising rates, traders said. Currently, other countries are offering sugar to importing nations at a cheaper rate than India, said Jain. Indian sugar is currently less competitive in the global market as Indian sugar is priced $20–$25 per tonne higher than global benchmarks like London futures. The benchmark sugar on the Intercontinental Exchange was trading at 14.24 cents per pound at the time of writing. India exported only about 200,000 tonnes of sugar as of December of the total allocated quantity of 1.5 million tonnes of the 2025-26 sugar season, according to traders. The pace of exports has further slowed down after that.

 

European countries are selling sugar at the benchmark global rate, Jain said. The European Union has been experiencing high volume of sugar imports under a special inward processing regime, which allows companies to import sugar at zero duty, refine it, and re-export it to markets like West Asia. Moreover, many countries have started to rely on domestically produced sweeteners, instead of importing at higher rates, Jain added.  End

 

US$1 = INR 90.57

 

Edited by Deepshikha Bhardwaj

 

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