India’s Sugar Production to Drop 17% in 2024-25
India’s sugar production for 2024-25 is projected to drop by 17% to 26.52 million tonnes due to adverse weather, disease, and lower recovery rates. With consumption at 29 million tonnes and closing stocks shrinking to 4.5 million tonnes, supply constraints are likely, especially during peak demand periods.
India’s sugar production for the 2024-25 season is expected to fall by 17%, reaching 26.52 million tonnes, as per the All-India Sugar Trade Association (AISTA). This decline, the first in several years, is attributed to factors like adverse weather conditions, diseases in Uttar Pradesh, and lower sugar recovery rates. AISTA also projects lower closing stocks, marking a significant reduction in carryover sugar, which could lead to a shortage of supply. Consumption is forecasted at 29 million tonnes, with exports at 1 million tonnes. The early closure of mills in Maharashtra and lower crushing capacity also impacts production.
Key Highlights
# AISTA estimates 26.52 mt of sugar production in 2024-25.
# Production drops by 16.9% from last year’s 31.9 mt.
# Red rot disease and floods impact sugar recovery in Uttar Pradesh.
# Maharashtra sees early closure of sugar mills due to increased capacity.
# Total (EPA:TTEF) availability for domestic consumption is projected at 33.5 mt.
India’s sugar production is expected to decline by 17%, reaching 26.52 million tonnes in the 2024-25 season, according to the All-India Sugar Trade Association (AISTA). The sharp drop is attributed to several factors, including weather irregularities, diseases affecting sugarcane in Uttar Pradesh, and reduced sugar recovery rates. The sugarcane harvest in Maharashtra also witnessed reduced yields due to erratic rains, affecting the overall output.
AISTA’s projections also show that sugar production has been impacted by sucrose diversion for ethanol production, with approximately 4 million tonnes of sugar expected to be used for ethanol production this season. The closing stocks for the season have been reduced to 4.5 million tonnes, which is expected to be the lowest in years. This could create a supply gap, especially during the festival season when demand is high.
The industry has also faced a decline in the number of mills operational, with 507 mills currently crushing cane, down from 524 last year. Although Uttar Pradesh has seen an increase in operational mills, Maharashtra and Karnataka report fewer mills in operation.
Despite the challenging production outlook, India’s sugar consumption remains steady at 29 million tonnes, and exports are pegged at 1 million tonnes. The total availability of sugar for the domestic market, after factoring in exports, is estimated at 33.5 million tonnes.
Finally
With a significant drop in production and reduced carryover stocks, India’s sugar market faces potential supply constraints, especially during peak demand periods.
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Source : Investing.com
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