Despite Higher Production, No Increase in Monthly Free Sale Quota for Sugar

04-Feb-2026 11:22 AM

New Delhi. Despite abundant sugarcane production and robust crushing operations, indicating a significant increase in domestic sugar production during the current marketing season of 2025-26, the government is exercising caution in determining the free sale quota compared to the 2024-25 season.

The free sale quota for sugar during the 2025-26 season was set at 24 lakh tonnes in October, a 6 percent decrease compared to 2024-25, and 22 lakh tonnes in November, a 9 percent decrease.

The December quota was kept stable at 22 lakh tonnes, while the January quota was reduced by 2.2 percent to 22 lakh tonnes. Now, a quota of 22.50 lakh tonnes of sugar has been released for February, which is the same as last year.

Typically, industrial demand for sugar weakens during the winter months, so the government keeps the quota limited to maintain market prices within a certain range.

However, industry analysts say that the significant increase in production will lead to a larger surplus stock of sugar, as less sugar is expected to be used for ethanol production this year.

Despite the lower quota released compared to the previous season, sugar prices are under pressure. In leading producing states like Maharashtra and Karnataka, the ex-factory selling price of sugar has fallen significantly below the cost of production.

Mills are accumulating sugar stocks, tying up their working capital. This could lead to difficulties in paying sugarcane farmers their dues.

The industry is continuously urging the government to increase the ex-factory selling price of sugar to provide some relief to the mills. Sugar production is estimated to exceed 300 lakh tonnes.