NFCSF Urges Timely Policy Support Amid 18% Production Decline

Welcomes Sugar (Control) Order, 2025

New Delhi, May 15, 2025:
The National Federation of Cooperative Sugar Factories Ltd. (NFCSF) has extended its strong support to the Government of India’s recently notified Sugar (Control) Order, 2025, describing it as a historic move aimed at modernizing and streamlining the country’s sugar industry.

The new order replaces the five-decade-old 1966 regulations and introduces a host of reforms including mandatory API-based digital integration for real-time data exchange between sugar mills and government systems, inclusion of raw sugar and key by-products such as bagasse, molasses, press mud, and ethanol under formal regulation, and the extension of FRP compliance to khandsari units with over 500 TCD capacity.

Welcoming the announcement, NFCSF President Harshvardhan Patil said the order reflects the government’s deep commitment to the welfare of sugarcane farmers, operational efficiency of mills, and consumer affordability. He further advocated for a similar revision of the Sugarcane (Control) Order to ensure consistency and alignment with current industry dynamics.

Production Drops 18% Amid Supply Challenges

The NFCSF highlighted that India’s sugar production has dropped by 18% this season, from 315.40 LMT in 2023-24 to 257.40 LMT, due to reduced cane availability and a decline in recovery rates from 10.10% to 9.30%. Major sugar-producing states like Maharashtra, Uttar Pradesh, and Karnataka witnessed significant drops of 29.25 LMT, 10.90 LMT, and 11 LMT respectively.

Despite this downturn, projected closing stock of 48–50 LMT is expected to be sufficient to meet domestic demand during October–November 2025. The 2025–26 season is projected to rebound, aided by favorable monsoons and increased cane sowing, particularly in Maharashtra and Karnataka.

Ethanol Diversion Shortfall and Price Challenges

NFCSF noted that ethanol diversion this season stood at 32 LMT, slightly below the 35 LMT target. The shortfall is attributed to the lack of a price revision for ethanol derived from sugarcane juice and B-heavy molasses, which led mills to favor direct sugar production. This resulted in an extra 3 LMT of sugar being produced.

Nevertheless, ex-mill sugar prices remain stable in the range of ₹3,880–₹3,920 per quintal, boosted by lower production and proactive export permissions. This has helped improve industry liquidity, enabling mills to clear ₹91,000 crore—90% of the total ₹1.01 lakh crore in cane dues—within six months of the crushing season.

NFCSF Policy Recommendations

In light of current challenges and future prospects, NFCSF has called upon the government to implement the following policy actions:

1. Increase the Minimum Selling Price (MSP) of sugar to offset rising production costs, now at ₹40/kg.
2. Announce an early ethanol diversion target of 50 LMT for the 2025–26 season.
3. Revise ethanol procurement prices, especially for juice and B-heavy molasses-based ethanol.
4. Continue a liberal sugar export policy to benefit coastal states and support price stability.

Harshvardhan Patil concluded, “NFCSF is fully committed to working with all stakeholders to ensure timely payments to farmers, maintain price stability, and support sustainable growth in India’s cooperative sugar sector.”