Chinimandi.com; New Delhi: April 08, 2026:NFCSF Seek Urgent Relief to Sugar Sector as Financial Stress Deepens

NFCSF SEEK URGENT RELIEF TO SUGAR SECTOR AS FINANCIAL
STRESS DEEPENS
NEW DELHI: INDIA’S cooperative sugar sector has raised concerns over
growing financial pressure despite stable sugar availability, urging the Centre
to step in with immediate policy support, Indian Cooperative reported.
The National Federation of Cooperative Sugar Factories Limited (NFCSF) has
called for changes to financial relief measures for cooperative mills, especially
the One Time Settlement (OTS) scheme under the Sugar Development Fund,
stating that the current framework has had limited success.
A delegation led by NFCSF President Harshvardhan Patil and Managing
Director Prakash Naiknavare met Ashish Kumar Bhutani in New Delhi to
present the sector’s concerns.
The federation said cooperative mills are facing rising sugarcane costs, weak
sugar prices and increasing dues to farmers, which have put pressure on their
finances. This has affected their ability to repay loans and continue operations
smoothly.
According to NFCSF, the current OTS scheme has seen low participation due
to the high interest burden on outstanding loans. It has suggested revising
the scheme by waiving at least 50 percent of normal interest along with penal
interest, saying this would encourage more mills to settle dues and improve
recovery.
Despite these challenges, the federation said sugar availability in the 2025–
26 season remains stable. Production is estimated at around 281 lakh tonnes
after diverting 28 lakh tonnes for ethanol. With an opening stock of 50 lakh
tonnes, total availability is expected to reach 331 lakh tonnes.
This is seen as enough to meet domestic demand of about 280 lakh tonnes
and allow exports of around 10 lakh tonnes. Closing stocks are projected at
41 lakh tonnes, the lowest since 2016–17 but still manageable.
However, the gap between production costs and market prices continues to
strain the sector. The average ex-mill sugar price is around ₹3,850 per quintal,
while production costs are estimated at about ₹4,100 per quintal. This gap of
nearly ₹250 per quintal is leading to losses for mills, worsening cash flow
issues and delaying payments to farmers.
The federation stressed that timely government action is essential to stabilise
cooperative mills and ensure farmers receive their payments without delay. It
also said it is ready to work with policymakers to secure the long-term stability
of the sector.