The Indian Sugar and Bio-energy Manufacturers Association has appealed to the government to immediately revise the minimum selling price (MSP) for sugar so that the mills are able to pay the farmers and do not incur losses from January.
The Minimum Selling Price (MSP) of sugar was originally introduced in June 2018-19 to address severe price distress arising from excess domestic stocks, global surplus and ex-mill prices falling below production costs resulting in substantial cane arrears. The sugar mills are facing similar conditions in 2025–26 sugar season. While the MSP has remained unchanged at ₹31 per kg since its last revision in early 2019, the cost of production has risen sharply due to continuous increases in cane prices and other costs, said Deepak Ballani, Director General of the Association.
The FRP has increased from ₹275 a quintal for the sugar season 2019-2020 to ₹ 355 a quintal. The sugar production cost is about ₹41.66 a kg. The growing mismatch between the cane and sugar prices poses a serious challenge towards timely cane price payments and the overall financial health of the sugar industry.
The domestic sugar consumption softened in the 2024-25 season, declining to 281 lakh tonnes from 290 lakh tonnes in 2023-2024.
A recent ISMA study on sugar consumption indicates that demand is expected to grow at just 1.5-2.0% CAGR over the next five years.
The sugar mills will have to pay the farmers within two weeks of procurement of cane. In the first couple of months, they will have funds. But, the situation may turn bad from January if the MSP is not revised, he said.
Published – December 20, 2025 09:36 pm IST
