There is, however, little knowledge coming to the Krishi Bhawan that is home to the agriculture ministry. Sugarcane farming is a vital part of India’s economy, employing millions of farmers and their families.

A steep drop in sugarcane procurement by sugar mills across the country is beginning to turn the lens on sugarcane farmers – sugarcane shortage has been largely attributed to adverse weather conditions and the outbreak of crop diseases.

In Uttar Pradesh, one of the largest sugarcane-producing states, Red Rot and Top Borer diseases have severely impacted yields. Heavy and untimely rainfall and flooding in certain districts have further worsened the situation, spreading the infections to unaffected crops, reducing both sugarcane production and recovery rates. Maharashtra and Karnataka have also suffered similar setbacks due to erratic weather patterns.

As a result, the Indian sugar industry is facing a severe crisis as 77 sugar mills have already ceased crushing operations due to an acute shortage of sugarcane. This unprecedented situation, primarily driven by adverse weather conditions and crop diseases, is expected to significantly impact overall sugar production in the country. Industry experts predict that sugar production could decline by nearly 15 per cent this year, reaching an estimated 27 million tons, compared to last year’s output.

There is, however, little knowledge coming to the Krishi Bhawan that is home to the agriculture ministry. Sugarcane farming is a vital part of India’s economy, employing millions of farmers and their families. Sugarcane is India’s most important cash crop and the second largest agro-based industry. 

A Glimpse of the Farmers’ Plight

According to the Indian Sugar and Bio Energy Manufacturers Association (ISMA), India’s sugar production as of February 15, 2025, stood at 197.03 lakh tonnes, marking a 12 per cent decline from the 224.15 lakh tonnes produced during the same period last year. The drop in production has been attributed to lower output in Maharashtra and Karnataka, two of the country’s largest sugar-producing states.

State-wise production figures highlight the decline:

• Maharashtra: Production fell from 79.45 lakh tonnes last year to 68.22 lakh tonnes this year.
• Karnataka: Production dropped from 43.20 lakh tonnes to 35.80 lakh tonnes.
• Uttar Pradesh: Production declined from 67.77 lakh tonnes to 64.04 lakh tonnes.

The decline in sugar production, attributed to adverse farm conditions, is expected to have a ripple effect on the supply chain, possibly leading to increased sugar prices in the domestic market.

India’s Sugar Production Falls 12%

A report from the National Federation of Cooperative Sugar Factories Ltd. (NFCSF), released on February 15, 2025, reveals a staggering increase in mill closures compared to the same period last year. By mid-February, 77 mills had shut down their operations, a stark contrast to the 28 closures recorded during the same period in the previous season.

State-wise data indicates that Karnataka is the worst-hit, with 34 sugar mills ceasing operations. Maharashtra follows with 30 mill closures, while Tamil Nadu, Uttar Pradesh, Telangana, Uttarakhand, Haryana, and Gujarat have also reported shutdowns. The steep decline in sugarcane availability has forced mills across these states to suspend their crushing activities much earlier than usual.

The crisis is particularly evident in Uttar Pradesh’s Bareilly district, where four sugar mills – Bahedi, Faridpur, Nawabganj, and Semikheda – have already issued closure notices. Similarly, the Bilaspur-based Cooperative Sugar Mill in Rampur district is preparing to halt operations. With sugarcane supply dwindling further, several mills in Western Uttar Pradesh are also expected to close by the end of February, exacerbating the industry-wide crisis.

In addition to the raw material shortage, the sugar recovery rate has also witnessed a significant decline. The national average sugar recovery rate has dropped from 9.87 per cent last year to 9.09 per cent this year. Karnataka has been the most affected in this regard, with recovery rates falling from 9.75 per cent to 8.50 per cent. Similarly, Uttar Pradesh recorded a decline from 10.20 per cent to 9.30 per cent. The decrease in recovery rates is adding further strain to sugar mills already struggling with low sugarcane supply.

Impact of Ethanol Diversion

Another contributing factor to the lower sugar production is the increased diversion of sugar for ethanol production. As per ISMA, sugar diversion towards ethanol has surged by nearly 70 per cent, reaching 14.1 lakh tonnes by January 31, 2025, compared to 8.3 lakh tonnes during the same period last year. The increased ethanol production, driven by government policies promoting ethanol blending in fuel, has further reduced the availability of sugar in the market.

With sugarcane supply dwindling, more sugar mills are expected to shut down in the coming weeks, further exacerbating the crisis. Industry experts warn that if the current trend continues, India’s sugar industry could face severe economic repercussions, including job losses and financial distress for sugar mills and farmers.

Despite the challenges, ISMA remains hopeful that improved sucrose content in late-harvested sugarcane may help partially offset the lower sugar recovery experienced in the first half of the season. Additionally, some sugar mills in South Karnataka are expected to resume operations during a special season from June to September 2025, potentially mitigating some of the losses.

However, with ongoing climate unpredictability and increasing crop diseases, long-term measures such as improved cane varieties, better irrigation systems, and enhanced pest control mechanisms will be crucial in ensuring the sustainability of India’s sugar industry.

The premature closure of 77 sugar mills due to sugarcane shortages signals a significant crisis in India’s sugar industry. With adverse weather conditions, declining sugar recovery rates, and increased ethanol diversion, the country’s sugar production has dropped sharply, affecting both farmers and mill operators. As policymakers and industry stakeholders navigate this crisis, immediate and long-term interventions will be necessary to stabilize production and prevent further disruptions in the sugar supply chain.