Net Sugar Production For SY25 To Be Lower Than Current Season: Report
India’s sugar production for the 2025 season is projected to decline due to increased ethanol diversion, with net production estimated at 29.3 MMT, down from 34 MMT in 2024. Domestic sugar stocks are expected to rise to 9 MMT by September 2024. Sugar prices in Uttar Pradesh remain firm, while international sugar prices have slightly declined. Ethanol blending reached 15.8% in July 2024.
Owing to the expected higher sugar diversion towards ethanol due to the government’s decision to remove the cap on the same, the net sugar production for the sugar year 2025 (SY25) is likely to be lower than the current season, as per the estimate by Icra. The Indian Sugar Mills Association (ISMA) has projected gross sugar production of 33.3 million metric tonne (MMT) in SY25 against 34 MMT in SY24.
After considering the ethanol diversion of 4 MMT, net sugar production is likely to decline to 29.3 MMT. Icra’s report stated that the clarity on the policy for allowing diversion beyond the expected level as well as allowing exports remain key monitorables for the sector.
The domestic sugar production is estimated at 28.5 MMT in SY24 (01 October to 30 September) and the closing stock is expected to be around 9 MMT as on 30 September 2024, higher than the sugar stock of 5.6 MMT as on 30 September 2023.
As far as the domestic sugar prices are concerned, the prices in Uttar Pradesh have remained in the range of Rs 38 to 39 per kilogram with the closure of the crushing season. Icra has expected them to remain firm till the start of the next season, due to the festive season.
The international prices of raw sugar declined to USD 406 per MT in August 2024 over USD 425 per MT in July 2024. The prices of white sugar have also dipped to USD 522 per MT in August 2024 as compared to USD 549 per MT in July 2024.
The report mentioned that India achieved an ethanol blending ratio of 15.8 per cent in July 2024. On the other hand, the cumulative ethanol blending from November 2023 to July 2024 stood at 13.3 per cent. Around 647 crore litre of ethanol has been contracted for the Ethanol Supply Year 2024 (ESY24) and 461 crore litre supply has been completed till July 2024.
Source Link : https://businessworld.in/article/net-sugar-production-for-sy25-to-be-lower-than-current-season-report-534806
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