The National Federation of Cooperative Sugar Factories Ltd. (NFCSF) released its latest market outlook on June 2, 2025, highlighting a stable sugar sector marked by healthy closing stocks, firm prices, and a promising outlook for the next sugar season.
According to the latest estimates, the sugar season 2024–25 is expected to close with a stock of 48.65 lakh metric tonnes (LMT), a level deemed sufficient to meet domestic demand for the crucial months of October and November.
Ex-mill sugar prices currently range between Rs 3,880 to Rs 3,920 per quintal, demonstrating remarkable price stability thanks to moderated net production, strong demand, and timely government interventions that include limited export allowances and regulated domestic supply.
The expected gross sugar production for the upcoming 2025–26 season stands at an impressive 350 LMT, boosted by favorable monsoons and expanded sugarcane cultivation in Maharashtra and Karnataka. NFCSF President Harshvardhan Patil credited this resurgence to improved rainfall and the government’s timely increase in the Fair & Remunerative Price (FRP) for sugarcane, which encouraged more farmers to invest in cane cultivation.
The press release also brought focus to the ethanol sector, recognizing it as a game-changing lever in the country’s sugar and clean energy ecosystems. Under Prime Minister Narendra Modi’s leadership, the Ethanol Blending Programme (EBP) has emerged as a viable solution to manage sugar surpluses.
The National Policy on Biofuels 2018 aimed to divert 60 to 70 LMT of surplus sugar annually toward ethanol production. Since the policy’s rollout, ethanol production capacity has more than tripled—from 518 crore litres in 2018 to 1,800 crore litres in 2025. This has driven the ethanol blending rate with petrol to reach 18.61% by April 30, 2025, up from just 4.22% seven years ago.
However, challenges persist. In sugar year (SY) 2022–23, the industry achieved a landmark by diverting 43 LMT of sugar to generate 369 crore litres of ethanol, covering 73% of national blending needs.
But in the following years, the ethanol supply from sugar-based feedstocks dropped to 270 crore litres in SY 2023–24 and is expected to fall further to 250 crore litres in SY 2024–25, contributing just 28% to the national ethanol target. This decline is largely due to stagnant ethanol procurement prices amid rising FRP for sugarcane, making direct sugar sales more profitable for mills than ethanol production.
While up to 40 LMT of sugar could theoretically be diverted for ethanol this year, only 32 LMT is expected due to this profitability gap. Consequently, a significant portion of India’s ethanol production capacity, now at 952 crore litres, including Rs 130 crore from multi-feed distilleries, is underutilized.
NFCSF stressed that sugar-to-ethanol diversion does not reduce sugar output but strategically manages surplus, sustains sugar mill finances, and ensures timely farmer payments.
To address these challenges, a high-level delegation led by IFGE’s Sugar Bioenergy Group Chairman Ravi Gupta recently met with PMO Adviser Tarun Kapoor. They presented policy suggestions such as revising ethanol procurement prices in line with input costs, extending blending targets to 2035, promoting Flex-Fuel Vehicles (FFVs), and exploring ethanol use in diesel.
The dialogue reflects the sector’s readiness to align itself with India’s clean energy goals while ensuring a balanced, prosperous sugar economy.
