India's Sugar Production Surges Amidst Challenges and Calls for Policy Support

India's sugar production has surged by approximately 9% in the 2025-26 season, totaling 272.31 lakh tons as of March 31, according to the Indian Sugar & Bio-Energy Manufacturers Association (ISMA). This increase comes despite a reduction in the number of operational mills, now at 56 compared to 95 the previous year.

In Uttar Pradesh, production remains steady at 87.5 lakh tons, but only 28 mills are functioning, down from 48 last year. Meanwhile, Maharashtra and Karnataka have posted significant production gains. Maharashtra's output has climbed to 99.3 lakh tons from 80.26 lakh, and Karnataka has seen production rise to 47.90 lakh tons from 39.94 lakh tons. Despite these increases, only four mills operate across these states, compared to seven last season.

The industry foresees certain mills in South Karnataka and Tamil Nadu resuming in a special season from June/July to September 2026. With rising production costs and ex-mill realisations lagging, ISMA calls for an early upward revision of the Minimum Selling Price (MSP) to align with current costs. There's also a push for accelerating ethanol blending to mitigate geopolitical risks and crude oil price surges. Additionally, disruptions in LPG supply have reduced sugar demand, pressing the sector to seek timely policy interventions for capacity optimization and market stabilization.