NFCSF seeks hike of MSP for sugar, price for ethanol

The National Federation of Cooperative Sugar Factories Ltd. (NFCSF) has urged the Modi Government to immediately revise the Minimum Selling Price (MSP) of sugar to Rs 41 per kg. The body has cited mounting production costs, falling ex-mill sugar prices and growing financial stress across the sector.

NFCSF is the top organisation which represents cooperative sugar mills. The federation warned that without timely policy intervention, the liquidity crunch faced by sugar mills could escalate into a wider crisis affecting millions of sugarcane farmers.

While welcoming the government’s decision to allow the export of 15 lakh metric tonnes (LMT) of sugar in the Sugar Season 2025–26, NFCSF said cooperative mills continue to struggle with cash flow constraints. These pressures, it noted, could delay cane payments and undermine farmer confidence in the cooperative framework.

As per reports, NFCSF President Harshvardhan Patil said that cooperative sugar mills are owned by millions of farmers and require decisive government support to sustain the current momentum of the season. Early policy action, he said, would enable mills to meet cane payment obligations, safeguard farmer incomes and maintain stability in the cooperative sugar ecosystem.

Ethanol on Focus

Patil also called for an additional diversion of 5 LMT of sugar towards ethanol production, which could generate nearly Rs 2,000 crore and significantly improve mill liquidity.

The Sugar Season 2025–26 has started on a strong footing, supported by early crushing and improved yields. As of December 15, 2025, 479 sugar mills had produced 77.90 LMT of sugar, compared with 60.70 LMT from 473 mills during the same period last year—an increase of 28.34%. Cane crushing rose by 25.61%, with sugar recovery trends also improving.

State-wise data show robust performance across major producing states. Uttar Pradesh reported higher recovery rates and increased output, Maharashtra more than doubled its production compared to last year, and Karnataka also registered notable growth.

Sectoral Demand

In the past one year, the ethanol production from grain-based sources has outpaced that from sugar-based feedstocks big way in India, triggering alarm within the sugar industry. Sugar industry has been demanding better ethanol pricing & procurement support. Earlier this year, NFCSF has called upon the government to permit the diversion of 18 lakh tonnes of surplus sugar towards ethanol production.

In light of these trends, NFCSF has urged the government to adopt a proactive policy approach, including revising the sugar MSP to Rs 41 per kg, enhancing ethanol procurement prices and permitting additional sugar diversion to ethanol, to ensure sectoral stability and timely farmer payments.