Sugar mills to start crushing early to ease festive season supply

Following discussions with the Centre, sugar mills will begin crushing sugarcane 10-15 days earlier than usual in the 2026-27 sugar season, which begins on October 1, to bring fresh sugar into the market ahead of the festive season

Following discussions with the Centre, sugar mills will begin crushing sugarcane 10-15 days earlier than usual in the 2026-27 sugar season, which begins on October 1, to bring fresh sugar into the market ahead of the festive season. The industry has, however, sought government support—including compensation for lower sugar recovery, a temporary waiver of the Centre’s share of Central GST and a higher domestic sales quota—to offset the financial hit from processing immature cane, saying mills were undertaking early crushing “in larger public interest”.

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The move comes as sugar prices continue to climb despite a series of government interventions. Average retail sugar prices touched a record ₹50 per kg on Thursday, up nearly 9% from a year ago and 7% over the past month. In recent weeks, the Centre has imposed stockholding limits on dealers, ordered physical verification of sugar stocks at mills and extended the ban on sugar exports through September in an attempt to cool domestic prices.

In a joint letter to the government, the Indian Sugar & Bio-energy Manufacturers Association (ISMA) and the National Federation of Cooperative Sugar Factories Ltd (NFCSF) said India had sufficient sugar stocks to comfortably meet domestic demand and there was “no cause for concern” over sugar availability.

Asked why mills needed to start crushing early if stocks were adequate, ISMA director general Deepak Ballani said the move was intended to ensure fresh sugar reached the market before the festive season rather than respond to any immediate shortage.

“The decision to commence crushing 10-15 days earlier is a proactive measure to ensure that fresh sugar reaches the market ahead of the festive season, ensure uninterrupted supplies and help maintain stable prices. It is a preventive step to reinforce supply,” Ballani said.

He said the benefit of an early start lay in timing rather than higher annual production, allowing fresh sugar to reach consumers sooner during the peak demand period.

However, a senior sugar industry executive, speaking on condition of anonymity, said the decision was also driven by concerns over how low sugar stocks could fall before the new season gathered pace.

“Traders estimate closing stocks at around 3.5 million tonnes. If October consumption is about 2.4 million tonnes, stocks at the end of October will be just 1.1 million tonnes. And if a large part of that inventory is concentrated in Uttar Pradesh, western and southern India could face severe supply tightness. That’s why an early start to crushing is important,” the executive said.

The executive added that the bigger uncertainty was sugar production in the 2026-27 season.

“Traders expect next year’s sugar production to be lower. Starting crushing early means processing immature cane, which leads to lower yield and sugar recovery. That could further reduce sugar production in 2026-27, creating supply pressure by May-June 2027 and potentially leading to shortages later in the season,” the executive said.

The industry has sought government support, arguing that harvesting cane before it fully matures comes at a financial cost.

“Starting crushing 10-15 days early means harvesting relatively immature sugarcane, which generally results in lower sugar recovery and consequently lower sugar production from the same quantity of cane. This translates into a financial loss for mills,” Ballani said.

To partly offset these losses, the industry has asked the Centre to allow mills to sell the additional sugar produced in October immediately instead of waiting for subsequent monthly release quotas. Under the existing release mechanism, mills can sell only a fixed quantity of sugar each month, and October allocations are typically low because crushing normally begins only towards the end of the month.

The industry has also sought a temporary waiver of the Centre’s share of CGST on domestic sugar sales. Ballani said the proposal was intended to support mill finances rather than directly lower retail sugar prices.

“The proposed CGST waiver is intended as a support measure for sugar mills, not as a direct consumer subsidy,” he said. “Early crushing is expected to reduce sugar recovery and increase production costs for mills. A temporary CGST waiver would help offset part of these losses and improve the financial viability of mills undertaking early operations.”

He argued that consumers would benefit indirectly because bringing fresh sugar into the market earlier would improve supplies and help moderate prices.

The industry has also urged gur and khandsari units to delay the start of their crushing operations. According to Ballani, these units traditionally begin crushing before sugar mills and compete for the same sugarcane during the initial weeks of the season.