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ISMA, NFCSF pitch for early crushing, seeks govt’s support to offset cost pressures
Aug-07-2026

With an aim to ensure availability of sugar ahead of the festival season, sugar industry bodies -- Indian Sugar & Bio-energy Manufacturers Association (ISMA) and National Federation of Cooperative Sugar Factories (NFCSF) have said that mills are ready to start the next crushing season 10-15 days earlier than usual, but sought the government’s support to offset the financial impact of the move. ISMA and NFCSF, in a joint letter to the food secretary, said that starting crushing early would ensure fresh sugar supplies were available ahead of the festive season. They said however, this initiative will entail significant operational and financial implications for sugar mills.

They said early crushing is likely to result in lower sugar recovery, reduced cane yields and lower operational efficiency, raising the overall cost of production, and added that the decision followed extensive consultations. The bodies said the industry is also facing sharply higher input costs. International sulphur prices have risen due to the Gulf region's geopolitical situation, while the cost of polypropylene bags has increased following revised Bureau of Indian Standards packaging specifications that require improved-quality material. They added 'These developments will further increase the financial burden on sugar mills undertaking early crushing in the larger public interest”.

ISMA and NFCSF sought government support to partly offset the losses, including compensation for recovery loss, an additional domestic sugar sale quota equivalent to October production, a waiver of CGST on domestic sugar sales, or any other suitable mechanism. They also urged the government to direct state authorities to ensure that gur and khansari units begin crushing operations only after sugar mills have started, saying this would ensure adequate cane availability for mills during the critical initial phase of the season, improve capacity utilisation and maximise sugar recovery. The bodies said recent movements in sugar prices did not reflect underlying demand-supply fundamentals.

Pan-India average ex-mill sugar prices through June were around Rs 39.5-40 per kg, below the average cost of production. Even after a recent increase, the season's average realisation through the end of July reached Rs 40-40.5 per kg, still below the production cost of about Rs 42 per kg. The industry has paid about Rs 1.10 lakh crore to sugarcane farmers so far in the 2025-26 sugar season, which runs from October to September. They said the recent price movement should therefore be viewed in its proper context and not as an indication of any supply constraint, added that India had adequate sugar stocks to comfortably meet domestic consumption and there was no cause for concern over availability.
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