A day after the government cut sugarcane production estimate by 5 million tonnes (mt), the All India Sugar Trade Association (AISTA) lowered its sugar production estimates by 0.72 mt from its first estimate after reviewing the progress of current crushing operation.
The Agriculture Ministry, on March 10, released the second advance estimates of crops where sugarcane production was lowered to 435.08 mt from 439.93 mt in the first estimate during 2024-25 crop year (July-June). Last year, India had produced 453.16 mt of sugarcane.
“Considering the average sugar recovery of a little more than 9 per cent, so far in this season, assuming that all the cane would have come to sugar mills, the 5 mt lower cane availability will mean a corresponding reduction of about 0.5 mt in sugar production,” said an industry official.
Karnataka up, UP unchanged
The downward revision was necessitated after there were reports of lower production number emerged in Maharashtra, Tamil Nadu and Gujarat, sources in AISTA said on Tuesday. Pointing out that its first estimate on January 28 had pegged sugar production at 26.52 mt, AISTA in a statement said that the Crop Committee deliberated on the issue and revised the output to 25.8 mt, with an error margin of (+/-) 2 per cent.
According to the state-wise breakup of the production estimates, Uttar Pradesh is seen at same level of 9 mt as in the first estimate while Karnataka may see the sugar output inching up to 4.1 mt from 4 mt.
On the other hand, production of sugar in Maharashtra is seen at 8 mt (against 8.3 mt in first estimate), in Tamil Nadu at 0.6 mt (1 mt) and in Gujarat at 0.8 mt (0.9 mt), AISTA said.
Diverson for ethanol down
The trade body said the sugar (in terms of sucrose) diversion for production of ethanol is also revised 3.8 mt against earlier estimates of 4 mt. “The factories in Maharashtra have closed or are closing earlier than expected and sugar production in the state may not exceed 8 mt while in Tamil Nadu it is down by 0.4 mt from the earlier estimates,” it said.
AISTA also said the closing stock of sugar in the current season as on September 30 is likely to be 37.8 mt based on a consumption estimate of 29 mt. However, a senior Agriculture Ministry official said the sugar consumption is not that high and it could be less than 27 mt. But, the government has already allocated 13.75 mt of sugar for the domestic consumption through its monthly quota system during first six months of current sugar season (October-September).
The government had allocated 29.15 mt of sugar in 2023-24 season and 27.65 mt in 2022-23 for domestic consumption.
177 mills end ops
According to National Federation of Cooperative Sugar Factories, production of sugar until February 28 since the season started from October 1, 2024, has reached nearly 22 mt against 25.47 mt a year ago. The Indian Sugar and Bio Energy Manufacturers Association (ISMA) said sugar production during October-February of 2024-25 was 21.98 mt and 177 mills have closed their crushing operation. But, ISMA withheld sharing the comparative production data of the year-ago period.
Industry experts said the government should make its own independent assessment rather than depending on one group or another as there is a comfortable closing stock required to meet any eventuality. Experts cautioned against any knee-jerk reaction after allowing 1 mt of export as it would send a wrong signal to the global market.
“In case a shortage of availability is perceived, the government can at any time extend the re-export time obligation for refineries who import raw sugar for the purpose of export and divert some quantity to domestic market,” an industry executive said.
