Indian Sugar output seen at 33 MT for 2024-25 season
The Indian government anticipates a sugar production of 33 million tonnes for the 2024-25 season, sufficient for both domestic use (29 million tonnes) and ethanol production (4.5 million tonnes). The robust crop outlook is attributed to favorable monsoon rainfall and increased sugarcane sowing. Ethanol output from sugarcane juice and B-heavy molasses is projected to support an 18% ethanol blending target. While the government plans to raise ethanol and sugar prices, exports are unlikely due to domestic needs. The blending target is set to reach 20% by 2025-26.
The food ministry has estimated sugar production at 33 million tonne (MT) for 2024-25 sugar season (Oct-Sept), which would be adequate to meet domestic annual consumption of 29 MT as well as 4.5 MT required for ethanol production.
Sources told FE as the crop condition is robust, the production would be definitely higher compared to previous season which had earlier forced the government to cut supplies to ethanol manufacture. “The sugar production prospects are much better than earlier estimated due to adequate monsoon rainfall, the output is expected to be around 33 MT this sugar season,” an official said.
Sugarcane sowing in the current kharif season was 5.76 million hectare, higher than previous year. Inflation in sugar has been in the single digit for last many years.
For 2023-24, sugar production is estimated at 32 MT, lower than 32.8 MT in the previous season.
Officials said at the beginning of sugar season on October 1 this year, carry forward stock with mills were 7.9 MT against 6 MT of sweetener at the beginning of the previous year’s season.
“Ethanol production from B-heavy molasses and sugarcane juice will divert 40 – 4.5 MT of sugar, supplying 400-450 crore litres of ethanol and achieving 18% blending target in 2024-25 ethanol supply year,” Deepak Balani, Indian Sugar Mills & Bio-Energy Manufacturers Association (ISMA) said.
However according to private estimate, 5 MT of sugar may be diverted for ethanol production
In August, the food ministry had allowed the use of sugarcane juice and sugar syrup for ethanol production in the 2024-25 ethanol supply year (ESY/November-October), reversing last year’s ban.
In December 2023, the government prohibited the use of sugarcane juice or sugar syrup for ethanol production in the 2023-24 ESY to ensure adequate sugar availability for domestic consumption and keep prices in check.
According to an official note, the blending percentage has touched 15.83% in July, 2024 and cumulative blending percentage has crossed 13.6% in the ongoing ESY 2023-24.
Encouraged by this progress, the government has set a target of reaching 20% blending by the end of 2025-26.
Food minister Pralhad Joshi had recently written to Niti Aayog to prepare a road map for achieving ethanol blending target to 25%. Joshi has noted that the government is considering proposals to increase the ethanol price for the 2024-25 ESY, along with the minimum selling price (MSP) of sugar by the mills. The current MSP of sugar has remained at Rs 31/kg since February 2019.
India is the world’s second largest sugar producing country after Brazil.
The government sees the ethanol blending program as a key to meeting its green energy commitments and improving the financial health of sugar mills.
However, the government is unlikely to allow sugar exports in the current season. India exported 6 MT of sugar in the 2022-23 season and since then the government has not allocated any quota for sugar exports.
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