New Delhi, September 25, 2025 – The Indian Sugar & Bio‑Energy Manufacturers Association (ISMA) has formally appealed to the central government to increase the Minimum Selling Price (MSP) of sugar to ₹40.2 per kilogram for the 2025‑26 season, citing severe cost pressures and the widening gap between production costs and current sugar pricing.
Stagnant MSP amid rising costs
The MSP for sugar has remained fixed at ₹31 per kg since February 2019, even as the Fair & Remunerative Price (FRP) for sugarcane has been increased annually.
ISMA argues this mismatch has squeezed margins for mills, making it hard to sustain operations and pay cane dues to farmers on time.
Higher production cost & lower recovery rates
ISMA states that due to rising input costs (fertilizers, labor, transport, etc.) and a decline in sugar recovery rates, the actual cost of producing sugar has risen to around ₹40.2 per kg—well above the current MSP.
In their view, continuing with the old MSP puts many mills at financial strain and risks destabilizing cane payments to farmers.
Need for automatic linkage mechanism
To prevent future disconnects between cane and sugar pricing, ISMA has recommended instituting an automatic adjustment mechanism linking sugar MSP to sugarcane FRP.
They warn that without such a change, mills may delay or default on cane payments, adversely affecting farmer income and sector stability.
ISMA expects sugar production in 2025–26 to reach ~34.90 million tonnes.
To manage surplus and support mill liquidity, ISMA has also recommended raising the export quota to about 2 million tonnes — up significantly from the <1 million exported in the prior season.
The association emphasized that ethanol production and blending must receive policy support and fair pricing, given the role of ethanol diversion in managing sugar surpluses.
