The National Cooperative Sugar Federation (NFCSF) has assured the Government of India of its full support in implementing measures aimed at containing the sharp rise in sugar prices across the country, while calling for steps to protect financially stressed cooperative sugar mills from further losses.
NFCSF President Harshvardhan Patil said the sudden price escalation had created uncertainty among all major stakeholders, including sugar mills, traders, consumers, sugarcane farmers and bankers.
He said the government was closely monitoring the situation and had already introduced several measures, including stock limits on traders and bulk buyers, physical verification of stocks at sugar mills and duty-free import of 10 lakh tonnes of raw sugar.
“The National Sugar Federation has been and will be standing firmly with the Government of India in smooth and effective implementation” of these measures, Patil said.
The federation, however, stressed that cooperative sugar mills had not benefited significantly from the current price spike. According to NFCSF, the average realisation for the entire sugar season remains around Rs. 40 per kg, against a current production cost of nearly Rs. 43 per kg.
As part of efforts to ease the supply situation ahead of the festive season, the cooperative sugar sector is prepared to begin crushing operations as early as October 15, 2026, subject to permission from respective state governments. Early crushing could help bring additional sugar into the market during the period of heightened festival demand.
NFCSF pointed out, however, that starting crushing early generally results in a 2-3% reduction in sugar recovery, imposing substantial financial losses on mills. It has therefore urged the Centre to compensate mills for the recovery loss and waive GST on sugar produced and sold during October and November 2026.
Liquidity remains another major concern. Several cooperative sugar mills across the country are struggling with persistent cash-flow problems and may find it difficult to meet pre-seasonal expenses. NFCSF has sought soft loans to enable such mills to commence crushing operations without further financial strain.
The federation has also renewed its demand for a minimum selling price of Rs. 43 per kg, corresponding to the current cost of production. It said such a floor price would enable lending banks to value sugar stocks at Rs. 43 per kg and provide additional working capital to cooperative mills.
On ethanol, Patil rejected the narrative that diversion of sugar towards ethanol was responsible for the current price rise. He described ethanol blending as a national priority programme launched in the interest of sugarcane farmers and said it needed to continue on a long-term basis, given the substantial investments already made in ethanol production capacity.
He also called for an increase in ethanol procurement prices, which, according to NFCSF, have remained unchanged for four years despite rising sugarcane and operational costs.
Patil said the share of the sugar sector in ethanol supply had declined from 86% to 28%, making it untenable to attribute the present sugar price surge to ethanol diversion.
Meanwhile, Sanjiv Chopra, Secretary, Department of Food and Public Distribution, said the recent increase in sugar prices was “not driven by fundamentals”, asserting that stocks remained ample and adequate. He cautioned stakeholders against profiteering, hoarding or speculation and against creating an impression of shortage.
