Sugar production seen to fall by 9%

The country’s sugar production in the 2022-23 season (Oct-Sept) could decline by 9% to 32.5 million tonne (MT) from the previous year’s output of 35.9 mt, due to lower yield in Maharashtra and parts of Karnataka, according to an industry estimate. The crop has been affected by adverse weather conditions like excessive rainfall and lack of sunlight during August-October season of last year.

Sugar prices, which have been stable since the last many years, are expected to increase in the summer months as demand for the cold drinks, ice cream and dairy products increase significantly.

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“Retail prices are yet to witness any increase as the government has been monitoring supplies as well as capped exports of sweetener in the current season to 6 MT,” Naiknavare, told FE.

According to the price monitoring cell of the department of consumer affairs, the modal retail prices of sugar on Wednesday was Rs 40/kg which has been unchanged in the last six months.

Retail inflation for sugar was 0.52% in March, 2023

Indian Sugar Mills Association (ISMA) has projected the sugar output for the 2022-23 season at 34 MT which excludes around 4.5 MT to be diverted towards making ethanol. The output is against 35.8 MT estimated in previou season.

Meanwhile, ISMA has stated that sugar production till April 15, 2023 in the current season has fallen by 6% to 31.1 MT from 32.8 MT on year. It has stated that out 532 mills which commenced production in the current season, 400 mills have closed their crushing operations.

Sources said that the government has decided not to approve a second tranche of sugar exports beyond 6 MT approved for the current season. This follows inputs received by the food ministry on the crop prospects from the various key sugarcane producing regions.

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In the 2021-22 season (Oct-Sept), out of the total sugar production of 44.4 MT, domestic consumption was around 27.3 MT while India exported a record 11 MT of sweetner. More than 3.6 mt of sugar was diverted for ethanol production.

In sugar seasons 2017-18, 2018-19 and 2019-20, only about 0.6 MT, 3.8 MT and 5.9 MT of sugar was exported.

The blending of ethanol with petrol stood at 10% in the previous year and it is expected to increase to 12% in 2022-23.

The government has set a target of 6 MT of surplus sugar would be diverted annually for ethanol production by 2025-26. The food ministry official said that this would solve the problem of high inventories of sugar, liquidity of mills thereby help in timely payment of cane dues to farmers