Draft Sugarcane (Control) Order 2026: Regulatory Revamp and Ethanol Integration

Key facts

• The Ministry of Consumer Affairs, Food and Public Distribution released the draft Sugarcane (Control) Order 2026 to replace the 1966 regulations.
• The draft order recognizes ethanol as a core output of sugar mills and brings khandsari sugar under the Fair and Remunerative Price (FRP) regime.
• For sugar units producing ethanol from sugarcane juice, syrup, and B-heavy molasses, 600 litres of bio-fuel will be counted as equivalent to one tonne of sugar.
• The draft rules prohibit the establishment of new sugar factories within a 25-km radius of an existing unit, increasing the distance from the current 15 km.
• Under the draft order, mills are required to pay for sugarcane within 14 days of delivery, with delayed payments attracting interest at 15% per annum.
• The order integrates by-product valuation for bagasse, molasses, and press mud to align sugar policy with the national biofuel programme.
• In the 2024-25 crop year, the total estimated sugarcane production was 43.5 million tonne (MT), with 13.5 MT used for manufacturing jaggery, juices, and khandsari.
• Khandsari sugar is primarily manufactured by approximately 370 units located in Uttar Pradesh, Bihar, and Maharashtra.