16 April 2025, New Delhi: As Maharashtra wraps up the current sugarcane crushing season, questions are already being raised about the viability of the upcoming 2025–26 season. Delays in farmer payments, financial stress in sugar mills, and uncertain production estimates are creating a cloud of doubt over the new season’s start and scale.
According to the Sugar Commissioner’s office, sugar mills in Maharashtra were required to pay ₹28,231 crore to farmers as Fair and Remunerative Price (FRP) by April 1. So far, ₹26,799 crore has been paid, leaving a significant ₹1,432 crore still pending. Action has been initiated against 15 mills for non-payment, while 105 mills have cleared all their dues.
Why this matters for the upcoming season
While the FRP dues may appear as a leftover issue from the current cycle, it could directly impact how the next season unfolds. Mills that are unable to settle current obligations may find it difficult to secure working capital for the next crushing season, leading to delayed procurement or reduced operations. Farmer confidence may also take a hit, especially if dues are not settled before sowing decisions are made.
Sugar stock auctions and the debt spiral
The Sugar Commissioner has the authority to recover pending dues by issuing Revenue Recovery Certificates (RRCs), which can lead to the auction of sugar stocks. However, this also signals deeper financial distress. Mills often mortgage sugar stocks to raise working capital. According to industry analyst Vijay Autade, banks currently lend against 85% of sugar stock value (₹3,500 per quintal), but deductions like margin money leave mills with insufficient liquidity. Moreover, many mills are still repaying past loans taken for earlier FRP obligations, keeping them trapped in a cycle of debt.
Next season starts with uncertainty
There’s no clear consensus yet on the closing production numbers for the current year. Estimates range between 4.4 million tonnes (National Federation of Cooperative Sugar Factories) and 5.4 million tonnes (Indian Sugar and Bio-Energy Manufacturers Association). This gap makes it difficult to accurately forecast opening stock for the 2025–26 season.
Additionally, the Centre has restricted exports to 1 million tonnes, of which 600,000 tonnes have already been traded. With international sugar prices showing a slight dip (FAO Sugar Price Index down by 1.6 points in March due to softer global demand), future revenue streams for mills may be tighter, limiting their ability to offer competitive cane prices in the next season.
Farmers want clarity and payments before sowing
Farmer leader and former MP Raju Shetti met with the Sugar Commissioner in Pune, demanding that pending dues be paid without delay. “If farmers don’t receive their money now, how can we expect them to trust the mills in the next season?” he said.
As Maharashtra gears up for the 2025–26 sugar season, the industry stands at a crossroads. Unless pending payments are cleared swiftly and financial bottlenecks are resolved, both farmer participation and mill operations could be at risk. The next season’s success will depend on how quickly trust and liquidity can be restored in the system.
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