Ethanol production to prevent Indian sugar exports, says trader Wilmar
India’s ethanol production surge for the 2024/25 season will reduce domestic sugar availability and halt exports, as 5 million metric tons of sucrose are redirected to ethanol. This leaves net sugar production at 27.5 million tons, falling short of the 29.5 million tons needed for domestic consumption. As a result, sugar stocks are expected to drop by 2 million tons, tightening the sugar supply-demand balance and increasing reliance on reserves to meet the demand.
Ethanol production increase in India for 2024/25 will reduce domestic sugar availability and halt exports, as 5 million metric tons of sucrose are diverted to ethanol. Net sugar production is forecasted at 27.5 million tons against a domestic consumption of 29.5 million tons, causing reduced stock levels.
AgenciesRepresentative image. The increase in ethanol production in India due to higher blending rates will reduce local sugar availability and prevent the country from exporting sugar in the 2024/25 season, Singapore-based commodities trader Wilmar said. India is the world’s second-largest sugar producer after Brazil, but the country has been absent from export markets to guarantee local supplies as larger shares of its sucrose output are diverted to produce ethanol instead of sugar. Wilmar projected on Monday that a total of 5 million metric tons of sucrose will be diverted to ethanol production in the 2024/25 season as India targets higher blending rates of ethanol into gasoline to reduce its oil imports.
As a result, the Asian trader estimates net sugar production to reach only 27.5 million tons in India, for a total country consumption of 29.5 million tons. The difference will come from stocks, which Wilmar projected to fall 2 million tons to 3.3 million tons at the end of the season. “Sugar diversion to ethanol will lead India to a tight sugar S&D (supply and demand) this season,” the trader said in a note.
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