Sweet gains: Sugar industry to benefit around Rs. 15,000 crore from govt’s recent measures
The Indian government’s export approval for 1 million tonnes of sugar has boosted domestic prices, benefiting sugar mills. Prices in Maharashtra and Uttar Pradesh surged, with expectations of further increases. Ethanol prices have also risen, strengthening millers’ financial outlook. Industry experts predict a ₹15,000 crore gain for the sugar sector in 2024-25 amid bullish market sentiment.
With the recent measures by the Indian government, sugar mills are likely to see significant financial benefits. The recent export permission for 1 million tonnes is expected to provide relief to millers, which has led to a rise in domestic prices.
After the government announced the export decision, there was an immediate positive shift in domestic market prices. Following the announcement, domestic prices surged from two- to three-month lows of Rs. 3350 in Maharashtra and Rs. 3650 in Uttar Pradesh, reaching Rs. 3800 and Rs. 4100 per quintal in Maharashtra and Uttar Pradesh, respectively.
Market sentiments have become more positive after announcing 22.5 Lakh MT domestic sugar quota for Feb. 2025 by the Food Ministry.
Maharashtra’s S/30 sugar trading between Rs. 3800 to Rs. 3825 per quintal, while Uttar Pradesh’s M/30 grade sugar trading at Rs. 4050 to Rs. 4100 per quintal.
As per trade sources, in Maharashtra, sugar for export is currently being traded between Rs. 4200 to Rs. 4300 per quintal. Some private sugar miller groups believe that an additional price increase of Rs. 50 to Rs. 100 can be seen in a short span of time.
The government have also recently increased the price of ethanol produced from C Heavy Molasses. The price will now be Rs.57.97 a litre against Rs. 56.28 earlier.
Recent collective decisions, along with the export of sugar and the increase in domestic sugar prices, have resulted in gains for sugar millers. According to national industry body and state sugar bodies of Maharashtra and Uttar Pradesh, the sugar production cost has been estimated to be around Rs. 39 to 41.66 per kg, and the domestic market is expected to reach this level. As a result, it will have a direct positive impact on the balance sheets of sugar companies. On average, the sugar industry is expected to benefit by Rs. 15,000 crore in season 2024-25.
At the Sugar – Ethanol and Bioenergy India Conference (SEIC 2025), during the panel session “The Bull & Bear Show of Domestic Sugar,” the majority of panellists emphasized that sugar production will be lower than the previous season and discussed the bullish market sentiments. Following the conference, the domestic market saw a rise in prices.
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Source : Chinimandi
