India’s Sugar Production Plummets, Industry Sees Shifts Amid Ethanol Drive
India’s sugar production for SSY25 is projected to fall below 27 MMT, down from 31.8 MMT last year, due to ethanol diversion, lower cane availability, and reduced recovery. Maharashtra and Karnataka saw major declines. Despite this, sugar prices remain stable, and a 1 MMT export quota may support the market, aided by a weak rupee and rising global prices.
India’s sugar industry faces a significant downturn as production for the sugar season year 2025 (SSY25) is projected to fall below 27 million metric tons (MMT), a steep decline from the 31.8 MMT recorded last year, according to Centrum. By February 15, 2025, production had reached 19.77 MMT, marking a 12% decrease from the same period last year. The drop is primarily attributed to increased diversion towards ethanol production, reduced cane availability, and lower recovery levels.
State data reveals Maharashtra as the hardest hit with a 14% year-on-year decrease in production, while Karnataka dropped by 13%, and Uttar Pradesh by 8%. Karnataka’s cane availability sharply fell by 22% year-on-year, impacting crushing volumes. In contrast, Uttar Pradesh maintained a somewhat stable supply with a slight 1.4% increase for the season. Early cessation of crushing operations was forced upon many mills, with shutdowns rising from 23 mills on January 31 to 51 by February 15.
Total sugarcane crushing is down 4.5% for SSY25, reaching 218 MMT compared to 228 MMT previously. The government’s policy reversal on FCI rice pricing and a modest 3% ethanol price hike for the C-heavy route have stirred industry discussions. Experts suggest a strategic shift towards prioritizing CH-based ethanol could alter future sugar and ethanol outputs.
Despite production drops, sugar prices remain stable, with Uttar Pradesh seeing rates around Rs 41,000 per ton and Maharashtra over Rs 37,500. These stable prices are likely to bolster the financial performance of sugar mills in the last quarter of FY25 and into FY26. Furthermore, the recent sanction of a 1 MMT sugar export quota is anticipated to support domestic prices, bolstered by the weak rupee and increasing global sugar prices.
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Source : Devdiscourse
