India’s sugar production set to decline 12% in 2025 amid cane diversion to ethanol 

INDIA – India’s sugar production is projected to decline in the 2025 season, with estimates placing total output below 27 million metric tons (MMT), a 12 percent drop from the 31.8 MMT recorded in the previous year.  

According to a report by Centrum, the decline is attributed to reduced sugarcane availability and increased diversion of cane for ethanol production. 

The ethanol pricing revision announced by the Indian government also fell short of industry expectations.  

While a 3 percent price increase was approved for the Chandigarh route, anticipated hikes for the Bihar and Direct routes were not implemented, leading to industry concerns. 

Despite these challenges, sugar prices have remained strong. In Uttar Pradesh, prices have exceeded Rs 40,000 per ton, while in Maharashtra, they have risen to approximately Rs 37,000 per ton.  

This price stability is expected to boost earnings before interest, taxes, depreciation, and amortization (EBITDA) in the fourth quarter of FY25 and into FY26. 

As of January 31, 2025, total sugar production in India stood at 16.5 MMT, down from 18.8 MMT recorded during the same period last year.  

The 12 percent decline is mainly attributed to lower cane availability, particularly in Maharashtra, and the continued redirection of sugarcane toward ethanol production. 

Data from key sugar-producing states reveals that sugarcane crushing has decreased by 3.9 percent year-on-year, with a total of 186 MMT processed as of the end of January, compared to 193 MMT in the same period last season.  

Maharashtra has witnessed a steep 15 percent drop in cane availability, significantly affecting overall sugar output. 

Ethanol production remains a key factor in this decline, as the government continues to promote ethanol blending to reduce fuel imports and support sustainability initiatives. 

The increased cane diversion has consequently reduced sugar production, though recent improvements in cane availability offer some relief. 

Maharashtra has seen a notable recovery over the past fortnight, with cane availability rising by 48 percent. However, the state’s overall availability remains down by 8.8 percent for the season.  

Karnataka has also demonstrated resilience, recording a 29 percent year-on-year increase in cane availability in the last two weeks. For the entire season, Karnataka has managed a 3.2 percent growth, reversing earlier declines. 

Uttar Pradesh, the largest sugar-producing state, has remained relatively stable. The state recorded only a 2 percent decline in cane availability in the recent weeks, leading to an overall growth of 1 percent year-on-year. 

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