★ India’s sugar industry is under severe stress in the 2025–26 season despite record output. Production has surged, but domestic consumption remains sluggish, ethanol diversion is limited, and global sugar prices are weak. According to Indian Sugar & Bio-energy Manufacturers Association (ISMA), sugar production reached around 11.9 million tonnes (119 lakh tonnes) by December 31, 2025, while total domestic demand is estimated at only 28–28.5 million tonnes for the season.

★ Although India achieved its ethanol blending targets, allocation of sugar-based ethanol has been lower than expected, leaving excess sugar in the market. Grain-based ethanol now accounts for over 70% of allocations, limiting relief for sugar mills.

★ In Maharashtra, ex-mill sugar prices have fallen below production costs. Exports under the government quota have also been muted due to weak global prices. At the same time, sugarcane FRP has increased, while the sugar MSP has remained unchanged for years, tightening mill liquidity and delaying farmer payments.

★ The industry is seeking higher sugar MSP, revised ethanol prices, and stronger export support. Without timely policy intervention, surplus sugar could deepen financial stress for both mills and millions of sugarcane farmers.