Positive Sugar Policy Decisions Likely Next Month

19-Dec-2025 08:43 PM

New Delhi: The Union Food and Public Distribution Secretary has stated that there is a strong possibility that the government may take some positive decisions next month to address the problems and difficulties faced by the sugar industry.

Due to surplus production, there is a likelihood of a sugar glut this year, and if it is not sold quickly, it could disrupt the industry's cash flow, potentially leading to a rapid increase in outstanding payments owed by sugar mills to sugarcane farmers.

Currently, the sugar industry is pressing for three key demands. It argues that the minimum ex-factory selling price of sugar has not been increased for a long time and remains stagnant at Rs 3100 per quintal,

while the cost of production has risen to Rs 4600 per quintal due to the annual increase in the Fair and Remunerative Price (FRP) of sugarcane. Therefore, a commensurate increase in the minimum selling price of sugar is necessary.

Similarly, the industry has demanded that the blending of ethanol produced from sugarcane be increased from the current level of 28 percent to 50 percent, allowing the industry to utilize more sugar in ethanol production. An increase in the selling price of ethanol produced from sugarcane is also being sought.

The industry's third demand relates to increasing the sugar export quota. Currently, the government has approved the export of 15 lakh tonnes of sugar for the 2025-26 season, while the industry is demanding that this be increased to at least 20 lakh tonnes.

If these three demands are accepted, the sugar industry could receive significant relief. Currently, sugar mills do not have large outstanding dues to sugarcane farmers, but if positive decisions are not taken in a timely manner, the outstanding amount could increase substantially.