Sugar prices trail costs, mills seek better realisation

Commodity Desk MUMBAI

India's sugar industry has room for better price realisation as current ex-mill sugar prices remain below production costs in key producing states, according to the Indian Sugar & Bio-energy Manufacturers Association (ISMA).

 Speaking to ANI, ISMA Director General Deepak Ballani said sugar mills are facing pressure as ex-mill prices in Uttar Pradesh are currently around ₹41-41.50 per kg, while prices in Maharashtra are close to ₹39 per kg.  These levels are below the estimated production cost of nearly ₹42 per kg. Ballani said improving sugar prices is important for the financial health of mills and for ensuring timely payments to sugarcane farmers. 

  Unless mills receive adequate value for sugar, it becomes difficult to clear farmers' dues on time. Despite export restrictions, sugar prices have remained largely stable, he said. 

  Ballani added that sugar inflation over the last decade has been among the lowest compared with many other commodities. Retail sugar prices are currently hovering around ₹46.50-47 per kg.  He further stated that whenever the Fair and Remunerative Price of sugarcane is increased, sugar realisations should also rise proportionately. 

  On sugar availability, ISMA expects closing stocks of around 42-43 lakh tonnes at the end of the 2025-26 sugar season, compared with an opening stock of about 50 lakh tonnes in the previous season.  

  Ballani said feedstock costs have increased sharply, with the FRP of sugarcane rising nearly 20% since ethanol prices were last revised. Inflation, higher conversion costs and increased financing expenses have further raised production costs.