India sugar body NFCSF urges immediate MSP revision as production rises, mill liquidity tightens 

INDIA – India’s National Federation of Cooperative Sugar Factories Ltd. (NFCSF) has called on the government to urgently revise the Minimum Selling Price (MSP) of sugar, citing rising production costs, declining ex-mill prices and growing financial stress across sugar mills and sugarcane farmers. 

While welcoming the government’s decision to allow exports of 15 lakh metric tonnes (LMT) of sugar for the 2025–26 sugar season, NFCSF said export permissions alone would not be sufficient to resolve the liquidity pressures facing cooperative mills. The federation stated that additional policy interventions are required to stabilise the sector and ensure timely payments to farmers. 

The 2025–26 sugar season has begun on a strong footing, supported by early crushing operations and improved yields. As of December 15, 2025, a total of 479 sugar mills across India had produced 77.90 LMT of sugar, compared with 60.70 LMT produced by 473 mills during the same period last year. This represents an increase of 17.20 LMT, or 28.34%.  

Cane crushing volumes rose by 183.75 LMT, an increase of 25.61%, alongside improving sugar recovery rates, according to NFCSF data. 

State-level performance reflects this upward trend. In Uttar Pradesh, 120 sugar factories have commenced crushing, processing 264 LMT of sugarcane to produce 25.05 LMT of sugar at an average recovery rate of 9.50%, up from 22.95 LMT and 8.90% recovery last year.  

Maharashtra reported significant growth, with 190 factories producing 31.30 LMT of sugar from 379 LMT of cane, compared to 16.80 LMT in the same period of the previous season.  

In Karnataka, 76 factories produced 15.50 LMT of sugar after crushing 186 LMT of cane, up from 13.50 LMT last year. 

Despite the strong production performance, NFCSF warned that the financial outlook remains strained. All-India average ex-mill sugar prices have fallen by nearly Rs 2,300 (US$ per tonne since the start of the season and are currently around Rs 37,700 (US$ per tonne, limiting mill liquidity and affecting their capacity to clear cane dues. 

The federation has proposed revising the sugar MSP to Rs 41 per kilogram, increasing ethanol procurement prices, and diverting an additional 5 LMT of sugar towards ethanol production.  

NFCSF estimates that the additional ethanol diversion could generate nearly Rs 2,000 crore, strengthening mill cash flows and supporting farmer payments. 

NFCSF noted that over Rs 1.30 lakh crore is payable to farmers as cane dues this season, while surplus sugar stocks could block nearly Rs 28,000 (US$ crore in working capital. Rising Fair and Remunerative Prices, State Advised Prices, and higher harvesting and transport costs have further elevated production expenses. 

The federation said it has submitted representations to the Prime Minister and the Union Minister for Consumer Affairs, Food and Public Distribution, seeking prompt policy action to safeguard the sector. 

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