The Indian government is formulating a strategy to manage a looming sugar surplus by increasing export caps and diverting more stock toward ethanol production. For the 2025-26 sugar season, production is estimated at 34.3 million tonnes. The government is considering raising the current export cap of 1.5 million tonnes to prevent a glut that could delay sugarcane payments to farmers.
To further protect farmer interests, the Ministry is mulling a hike in the Minimum Sale Price (MSP) for sugar. The sugar industry, led by ISMA, has urgently demanded a revision of the MSP, which has remained stagnant at ₹31 per kg since early 2019 while production costs have risen to approximately ₹41.66 per kg.
Industry leaders have pointed out that cane arrears in states like Maharashtra are already rising, with initial estimates reaching ₹2,000 crore. ISMA argues that because sugar has a low weightage in the consumer price index and MSP revisions do not impose a fiscal burden on the government, a cost-linked formula should be adopted to ensure timely payments to millions of sugarcane farmers.