Sugar prices are expected to improve due to lower quotas

30-Oct-2025 01:00 PM

New Delhi. Sugar prices are expected to improve due to the lower free sale monthly quota for November and the increase in the State Supported Price (SAP) for sugarcane in Uttar Pradesh.

The SAP for sugarcane in Uttar Pradesh has been significantly increased by ₹30 per quintal. There is also talk in the market that the government may allow the export of 1 million tons of sugar.

The Union Food Ministry has set a domestic sales quota of only 2 million tons for November 2025, significantly lower than the October quota of 2.4 million tons and the November 2024 quota of 2.2 million tons.

The industry also has limited sugar stocks. In such circumstances, some improvement in sugar prices can be expected.

The Association of Indigenous Industries is likely to review its sugar production estimates for the 2025-26 season soon, while the Food Ministry has estimated a total production of 34 million tons.

The Vice President of ISMA, the apex industry body, stated that the ethanol production quota for sugarcane-based distilleries has been reduced, forcing mills to increase sugar production.

Given this, there is a pressing need to allow the export of 2 million tons of sugar. The government's ethanol quota for sugarcane-based distilleries requires only 3.4 million tons of sugar to produce.

The Committee on Markets is expected to consider whether to allow sugar exports next week. For the 2024-25 season, 1 million tons of sugar was approved for export, but actual shipments reached only around 800,000 tons.

According to ISMA, the ex-factory minimum selling price (MSP) for sugar also needs to be increased to ₹4,000 per quintal.

There has been no increase since February 2019, while the Fair and Remunerative Price (FRP) for sugarcane has increased by 29 percent to ₹355 per quintal. The production cost of sugar is likely to increase to Rs 4024 per quintal.