India’s sugar consumption may slump to below 28 million tonnes this season
India has allocated a reduced sugar quota of 2.3 million tonnes (MT) for June 2025, down 0.25 MT from last year, signaling a likely drop in annual sugar consumption to below 28 MT, compared to 29.05 MT in 2023-24. Factors include weak summer demand, early monsoons, and bearish market sentiment amid low global prices.
The Indian government on Friday allocated a 2.3 million tonnes (mt) sugar quota for domestic sales for June. It is 0.25 mt lower than the quantity permitted a year ago. With this, the 2024-25 sugar season (October-September) may witness a slump in the country’s sugar consumption to less than 28 mt against a record 29.05 mt in 2023-24.
The monthly sugar quota release order, issued by the Food Ministry, shows that the notional stock as of May 31 may be 13.43 mt, based on the production data submitted by mills and the permitted quota for domestic sales and export. With the industry’s projection of 0.4-0.5 mt of more sugar to be produced by mill in Tamil Nadu and Karnataka in the special season until September 30, the availability may be a maximum of 13.93 mt in the four remaining months of the current season.
Slew of reasons
On the other hand, the consumption as per quota system during June-September period may be at least 9.1 mt including the 2.3 mt June allotment. This leaves this season’s closing stock to fall below 5 mt, which will be at par or may be a tad lower than the October-November festival season’s demand next season, industry experts said.
“Last season, there was high demand for sugar due to the general elections. Everyone was anticipating a drop in consumption this season. Probably the usual summer demand is missed this time due to frequent rains in many parts of the country. Going by last season’s quota of 6.95 mt for the July-September quarter and the current year’s allocation of 20.75 mt between October 2024 and June 2025, the total consumption may be safely pegged at 27.5-27.7 mt,” said a sugar company official requesting anonymity.
All India Sugar Trade Association (AISTA) Chairman Praful Vithalani told businessline: “There is a weak sentiment due to low international market rate (of sugar), exports failure, early monsoon, projection of bumper production for the 2025-26 season, Diwali coming earlier in October (usually in November) while new season’s supply will commence on November 7.”
Errant mills exempted
Commodities prices are based on market sentiments, and that is missing as several reasons are against the trend, he said.
Industry sources said the government reconciles the consumption data every six months and the consumption could be 28.5 mt this season, while pointing out overselling of monthly quotas by some mills.
The Food Ministry’s monthly release order shows mills in Uttar Pradesh have been allotted 0.95 mt, where the notional closing stock is estimated at 5.31 mt as of May 31. Maharashtra mills have received permits for 0.68 mt where the closing stock is projected at 4.21 mt. In Karnataka, mills have got allocation of 0.27 mt and the closing stock is seen at 1.64 mt. Uttar Pradesh, Maharashtra and Karnataka are India’s top three sugar producing States, sharing over 80 per cent of national production.
The Ministry, while releasing the sugar quota, said as new modalities for action to be taken against the non-compliant sugar mills of monthly quota orders were issued in March and made applicable in April, erring mills have been exempted from deduction in quota even though they violated the March allocation. However, all the sugar mills should adhere the compliance of the order in letter and spirit, it said.
It also said that the process of integrating the ERP/SAP systems of sugar mills with the NSWS portal through APIs is underway and it is required to be completed by June 15. “All sugar mills are hereby directed to ensure development their API modules and integrate with NSWS portal in a time bound manner and submit the monthly P-II for April-2025 through API by June 15,” it said.
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Source : The Hindu Business line
