Timely approval of sugar exports and clear directives on sugar diversion for ethanol production are essential for the long-term sustainability of sugar mills, said Deepak Ballani, Director General of the Indian Sugar and Bio-energy Manufacturers Association (ISMA).
He warned that in the absence of these measures, surplus sugar could flood the domestic market, leading to a price crash and adversely affecting the profitability and operational viability of the industry.
Calling for prompt action from the government, Ballani stressed the need for a well-balanced approach between sugar and ethanol.
“It is extremely important to strike a balance between sugar and ethanol production. We are expecting a gross sugar production of around 35 million tonnes, while domestic consumption is projected at 28.3 to 28.4 million tonnes. To maintain optimal stock levels, it is necessary to divert approximately 4.5 to 5 million tonnes towards ethanol production and allow for sugar exports of around 2 million tonnes. This would help ensure a healthy balance between sugar, ethanol, and export commitments,” he explained.
He said any delay in approvals will impact sugar mills negatively. Recently, Crisil Ratings pointed out that profitability gains will be limited if ethanol prices and sugar exports remain stagnant.
“If you don’t have a proper diversion or if the exports are not announced on time there will be too much sugar in the country creating a glut so that will bring the domestic prices down, affecting the viability of the mills’ profitability,” he added.
Indian Sugar Mills Association predicted that the total acreage under sugarcane in the country is estimated to be around 57.24 lakh hectares in 2025-26 sugar season against 57.11 lakh hectares in 2024-25, marginally higher than last year.
The abundant rainfall received in May was particularly beneficial, enhancing soil moisture and supporting early crop growth.
Speaking about the factors supporting increments in the sugarcane production, he said increased yield in Maharashtra and Karnataka, crop area increase and improvement in recovery are significantly improving the outlook.
ISMA has released its 1st preliminary sugar production which indicates increase in gross sugar production (before diversion) by 18 per cent to around 349 lakh tons against 295 lakh tons produced last year.
In response to a question on 25 per cent US tariff impact on India’s food processing and allied sectors where sugar is a major substance, Ballani stated that strong economy and efforts on the policy front will overcome challenges imposed by the US on export of Indian goods.
