India’s sugar sector stable with positive outlook for 2025

By Deepak Ballani 

India’s sugar industry is an integral component of its agricultural economy. It is essential for meeting domestic consumption needs, contributing to the Ethanol Blending Programme (EBP) of the nation, and also stands as one of the significant global exporters of sugar.

As the 2024–25 sugar season (October–September) progresses, precise assessments of production and supply are paramount for market stability, effective policy planning, and securing national requirements. In this context, the Indian Sugar and Bio-Energy Manufacturers Association (ISMA), the sector’s apex body, has released its comprehensive mid-season review based on data up to mid-April 2025. This latest assessment provides crucial clarity, confirming that despite necessary forecast adjustments reflecting regional realities, India’s sugar availability remains stable and sufficient for the current season.

Stable Sugar Supply Affirmed for 2024–25 Season

ISMA affirms the stable and sufficient availability of sugar across the country for the ongoing 2024–25 Sugar Season (SS), dispelling concerns about potential shortages and supply constraints. Based on its data-driven assessments, the association assures that domestic demand will be met comfortably, countering market speculation with reliable figures.

Following a detailed analysis by ISMA, as of 15 April 2025, India has produced 254.97 lakh tonnes of sugar, after diversion of sugar towards ethanol production, with 38 factories currently operating across the country. A total sugar diversion of around 35 lakh tonnes is expected this season, compared to 21.5 lakh tonnes diverted last season.

While Maharashtra and Karnataka experienced lower cane yields, leading to earlier closures for many mills, in Uttar Pradesh the season is expected to extend up to late April/early May due to better cane recovery, with close to 20–25% of factories still running. Additionally, some mills in Karnataka and Tamil Nadu are expected to resume operations in June/July 2025 for a special season, further adding to production during this season up to September 2025.

The Projected Sugar Balance Sheet

ISMA projects a closing stock of 54 lakh tonnes by 30 September 2025, ensuring adequate availability for domestic consumption well into the next season.

Sustainable Pricing

While the Fair and Remunerative Price (FRP) for sugarcane has increased by 11.5% over the last two years (2022–23: ₹305/quintal; 2024–25: ₹340/quintal), retail prices of sugar have only risen by a modest 5%, from ₹42.52/kg in 2022 to ₹44.70/kg in 2024. This stands in contrast to price increases of 7% to 42% in other essential commodities such as rice, wheat, pulses, and edible oils, underscoring sugar’s relative price stability and consumer affordability.

The financial well-being of farmers remains a priority. By mid-March 2025, nearly 80% of cane payment dues for the current 2024–25 season had been cleared — a significant improvement. Furthermore, an outstanding 99.9% of dues for the previous 2023–24 season have been settled. This timely clearance directly benefits the financial stability of approximately 5.5 crore farmers and their families.

The Indian government’s decision to allow the export of 10 lakh tonnes of sugar has been a crucial policy measure. ISMA confirms that this allowance has significantly benefitted the industry by:

Balancing domestic stock levels effectively.

Providing essential financial stability and liquidity to sugar millers.

Directly enabling prompt and improved cane payments to farmers, contributing to the high clearance rates noted above.

Contributing approximately ₹4,500 crore to India’s foreign exchange reserves, strengthening the national economy.

Positive Outlook: Foundations for the 2025–26 Season

ISMA maintains an optimistic view for the 2025–26 sugar season, considering the following favourable factors:

Positive monsoon predictions for 2025 leading to good water reservoir levels.

Increased sugarcane planting activities in Maharashtra and Karnataka, supported by the favourable 2024 monsoon and adequate water availability.

Replacement of older cane varieties with improved ones in Uttar Pradesh and other northern states, expected to increase yield and recovery rates in the region.

These factors support the expectation of an on-time start to the crushing season in October 2025, with potential for robust early-season production. Historical trends suggest output in the first two months (October–November) could exceed 43 lakh tonnes, ensuring a stable supply from the beginning of the next season.

Conclusion

Current data and analysis from ISMA provide clear insights into the operational stability and resilience of the Indian sugar sector. Despite necessary mid-season revisions, sugar supply is predicted to be adequate for 2024–25, with a comfortable closing stock. Strategic export allowances have improved millers’ financial positions, which in turn have supported timely payments to farmers and ensured retail price stability for consumers. With a favourable outlook for 2025–26 and a data-driven approach to industry management, ISMA continues to guide the sector through shifting conditions. Overall, the Indian sugar sector appears robust and well-positioned to meet national needs while maintaining its crucial role in the agricultural landscape.

(The author is the Director General of the Indian Sugar and Bio-energy Manufacturers Association.)

Courtesy – Money Control