UP leads in sugar production despite drop in output; slump in recovery sparks alarm

Lucknow: Uttar Pradesh has retained its position as India’s top sugar producer in the 2024–25 crushing season, churning out 92.75 lakh tonnes of sugar so far. But this achievement masks deeper troubles — a significant drop in output and a sharp decline in sugar recovery rates have set off alarm bells across the sugar sector.

According to the National Federation of Cooperative Sugar Factories Ltd (NFCSF), UP’s sugar production has fallen nearly 11% from last year’s 103.65 lakh tonnes. More worrisome, however, is the plunge in sugar recovery — the amount of sugar extracted from cane — which has dropped from 10.60% to 9.70%.

“This drop in recovery is a serious concern not just for Uttar Pradesh, but for the country’s entire sugar ecosystem,” said a senior expert in the sugar sector. “Erratic weather, crop diseases, and inconsistent cane varieties are contributing to this trend. We need immediate corrective steps before it becomes a long-term crisis.” Despite the setbacks, UP’s performance remains relatively better compared to other sugar-producing states. National sugar production has declined by a staggering 18.38% — from 316.35 lakh tonnes in 2023–24 to just 258.20 lakh tonnes as of July 30, 2025. The all-India average recovery rate, too, has fallen from 10.10% to 9.30%.

Maharashtra has seen the sharpest decline in sugar output, dropping from 110.20 lakh tonnes to 80.95 lakh tonnes. Karnataka’s production is expected to fall from 53 lakh tonnes to 42 lakh tonnes, with the state’s recovery rate plunging to just 8.05% — far below UP’s.

Uttar Pradesh is also a key player in India’s ambitious ethanol blending programme, which hit its 20% blending target five years ahead of the 2030 deadline. A significant portion of this ethanol is produced from sugarcane, much of it sourced from UP.

Of the 700 crore litres of ethanol supplied in the current ethanol year, 38% has been produced from sugarcane-based feedstock — with UP emerging as a leading contributor.

In a move to diversify ethanol sources, the Maharashtra government recently approved multi-feed distilleries, a model that UP is now considering to future-proof its sugar economy.

Meanwhile, the NFCSF has urged the Centre to intervene by raising the minimum selling price (MSP) of sugar, revising ethanol procurement rates, and lifting export restrictions. These steps, the federation argues, are vital for the survival of sugar mills — especially in UP, where the sector supports lakhs of farmers. “Without urgent policy support, mills won’t survive — and that will have a domino effect on rural livelihoods,” the NFCSF said in its latest report.

The festive season is expected to boost sugar demand. Ex-mill sugar prices had dipped below ₹3,900 per quintal in May, but prices are now showing signs of recovery. “This uptick could give mills the breathing space they need to carry out repairs and gear up for the next crushing season,” said an NFCSF official.

Despite the current downturn, the outlook for the 2025–26 season is cautiously optimistic. A good monsoon, a likely increase in cane acreage in UP and Karnataka, and a timely hike in the Fair and Remunerative Price (FRP) could push sugar production back up to 350 lakh tonnes — provided the recovery rate issue is addressed.