India’s Sugar Production Pegged at 343.5 Lakh Tonnes as ISMA Flags Price Stress and Ethanol Push

18 December 2025, New Delhi: The Indian Sugar & Bio-Energy Manufacturers Association (ISMA) held its Annual General Meeting (AGM) in New Delhi today, underlining a comprehensive, future-ready roadmap for India’s sugar and bio-energy sector at a time when sugar production and ethanol-led diversification are becoming central to the country’s food and energy security strategy.

The AGM was graced by Shri Pralhad Joshi, Hon’ble Minister of Consumer Affairs, Food & Public Distribution and New & Renewable Energy, Government of India, and Shri Sanjeev Chopra, Secretary, Department of Food & Public Distribution. Senior officials from the Department of Food & Public Distribution and industry leaders were also present.

Addressing members and stakeholders, ISMA reiterated its commitment to working closely with the Government of India and all value-chain partners to ensure the long-term sustainability, competitiveness, and growth of the sugar and bio-energy industry. The Association stressed that proactive engagement with policymakers is critical to addressing immediate market pressures while preparing the sector for future opportunities linked to energy transition, sustainability, and technological advancement.

A key concern highlighted at the AGM was the current economic stress faced by the sugar sector. ISMA noted that sugar prices have softened and are presently below the cost of production, impacting mill viability and timely payments to farmers. The Association emphasised the urgent need for an upward revision of the Minimum Selling Price (MSP) to stabilise the sector, ensure farmer dues are cleared on time, and prevent the accumulation of cane arrears.

Strengthening the ethanol ecosystem remained another major focus area. ISMA highlighted that ethanol procurement prices for the 2025–26 Ethanol Supply Year need a timely upward revision, as prices have remained unchanged for the past three years despite rising input and operational costs. The Association reiterated the need for a level playing field for sugarcane-based ethanol producers, particularly from the private sector, to sustain investments and capacity creation across the country.

To ensure long-term and sustained ethanol demand, ISMA will continue to advocate for reduced GST and fiscal incentives for Flex-Fuel and Strong Hybrid Vehicles (FFVs/HEVs). Wider adoption of flex-fuel vehicles was identified as the most scalable solution to fully utilise the ethanol production capacities already established in India.

Looking beyond the current E20 blending target, ISMA called for a clear, phased roadmap for ethanol blending beyond E20 to provide long-term visibility and confidence to investors. The Association also highlighted the potential of diesel blending with Iso-Butanol as a promising opportunity to further expand and diversify India’s biofuels ecosystem.

On the sugar production front, ISMA reaffirmed its first advance estimate for the 2025–26 sugar season, released in November 2025. Based on pan-India satellite imagery captured in late October 2025 and extensive field assessments, gross sugar production has been estimated at 343.5 lakh tonnes. Further analysis using special satellite imagery of Maharashtra and Karnataka from late November and early December 2025, along with crushing trends and field reports, indicated a 28 per cent year-on-year increase in production as of mid-December 2025. Improved cane yields and better recovery rates in key states have supported this outlook, leading ISMA to reaffirm its gross sugar production estimate of 343.5 lakh tonnes for the season.

Commenting on the outlook, Gautam Goel, President, ISMA, said that the Indian sugar and bio-energy industry is at a pivotal juncture. He emphasised that while addressing immediate economic challenges is essential, the larger focus must remain on building a future-ready sector anchored in technology, sustainability, and diversification. He reiterated ISMA’s commitment to constructive engagement with the Government to unlock long-term growth opportunities for both the industry and farmers.

Niraj Shirgaokar, Vice President, ISMA, highlighted the growing importance of ethanol in India’s energy transition. He noted that timely revision of ethanol procurement prices and clear policy direction beyond E20 would be critical to sustaining investments, maintaining momentum in the biofuels ecosystem, and supporting India’s Net Zero ambitions.

Deepak Ballani, Director General, ISMA, stated that the coming year would focus on building new capabilities across the sector, including advanced cane development, digitalised sugar mills, and diversification into bio-based products. He added that these efforts align closely with the vision of Atmanirbhar Bharat and Viksit Bharat, strengthening self-reliance, sustainability, and farmer prosperity, while positioning India’s bio-energy sector as a scalable development model for the Global South.

Also Read: Indian Sugar Production Jumps 28%, but Falling Prices Raise Alarm for Mills and Farmers

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