News Capsule: Sweet relief for sugar industry amid ethanol and pricing challenges
10-Nov-2025 11:20 AM
News Capsule: Sweet relief for sugar industry amid ethanol and pricing challenges
★ The central government has approved the export of 1.5 million tonnes of sugar for the 2025–26 season, bringing some much-needed relief to the sector that has been struggling with ethanol allocation cuts, higher cane prices, and political pressures.
★ The first setback came with the ethanol supply tender for the 2025–26 supply year (beginning November), where oil marketing companies (OMCs) allocated only 0.28 billion litres—around 27–28% of the total requirement of 1.04 billion litres—to sugarcane-based feedstocks, while grain-based ethanol producers received 72% (0.76 billion litres).
★ This move came despite the sugar industry having invested over ₹40,000 crore to create an ethanol production capacity exceeding 9 billion litres, in line with NITI Aayog’s 2021 Biofuel Roadmap (2020–25). The roadmap had projected that by 2025–26, about 55% (0.55 billion litres) of total ethanol required for 20% blending would come from the sugar sector.
★ Meanwhile, state governments have increased sugarcane prices across key producing regions.
In Uttar Pradesh, the State Advised Price (SAP) for the 2025–26 season was raised by about ₹30 per quintal, setting prices at ₹400 per quintal for early-maturing varieties and ₹390 for common varieties.
★ In Karnataka, the procurement price was raised from ₹320 to ₹330 per quintal, while Punjab farmers have demanded an increase from ₹400 to ₹500 per quintal.
★ These hikes are expected to push production costs from ₹41 per kg to nearly ₹42–43 per kg, squeezing millers’ margins.
★ However, the Centre’s decision to permit sugar and molasses exports and remove the 50% export duty on molasses has revived optimism in the industry. The sector hopes that this marks the beginning of further policy support, including a possible hike in ethanol procurement prices.
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India’s sugar exports (million tonnes):
2020–21: 70
2021–22: 110
2022–23: 63
2023–24: 1
2024–25: 10
2025–26: 15 (approved)