Sugar production dips due to “strange” weather; shortage may fuel prices
The 2024-25 sugar season saw lower production due to weather issues, with 165 lakh tonnes produced by January 31. Sugar recovery dropped to 8.91%. Government measures, including exports and ethanol pricing, may help liquidity. With estimated production at 270 lakh tonnes, low stocks could support sugar prices, aiding mill payments to farmers.
The 2024-25 sugarcane crushing season has seen a decline in production due to weather fluctuations. By January 31, 494 factories were operational, 23 fewer than last year. Sugarcane crushed stood at 1855 lakh tonnes, 76 lakh tonnes less than last year, leading to lower sugar production at 165 lakh tonnes.
Sugar recovery dropped to 8.91%. Early-ending seasons in Maharashtra and Karnataka, combined with delayed starts due to elections and weather, further impacted output. Government measures on sugar export and ethanol pricing may aid liquidity, but sugar stocks are expected to remain low.
According to the sugarcane crushing progress report as on January 31, 2025, a total of 494 factories in the country took up the crushing season, which is 23 less than the 517 factories last year.
Till this date, 1855 lakh tonnes of sugarcane has been crushed in the country, which is 76 lakh tonnes less than the 1931 lakh tonnes crushed till this date last year. As a result, 165 lakh tonnes of new sugar has been produced at the national level by the end of January 31, which is 22 lakh tonnes less than the 187 lakh tonnes produced till this date last year.
The average sugar recovery at the national level is also 8.91 percent, which is 0.79 percent lower than the 9.70 percent of the same date last year.
“This year’s season 2024-25 is going through a strange situation due to the changing cycle of the weather. After the drought-like situation earlier, there was excessive rains and in some places, the standing sugarcane has come in flowering in many parts of Maharashtra and Karnataka.
Due to which it is observed that the growth of sugarcane has slowed down and the sugar content in it has decreased. Due to this, the crushing season of the factories in these areas is expected to end earlier than expected,” said Harshvardhan Patil, President of the National Federation of Cooperative Sugar Factories (NFCSF).
“The central government’s announcement of 10 lakh tonnes of sugar export as well as the new purchase price of ethanol will help in improving liquidity of the sugar industry pan India . Along with this, if a decision is also made on the much-awaited minimum selling price of sugar, it will be welcomed by the National Federation of Cooperative Sugar Factories, the apex body of all cooperative sugar factories in the country,” said Harshvardhan Patil.
As a result of the above situation, there are indications of a decrease in the initially expected sugar production by the end of the season. The state-wise picture in this regard is as follows. (The figure in brackets indicates the previous estimate). Uttar Pradesh 93 lakh tonnes (98 lakh tonnes), Maharashtra 86 lakh tonnes (87 lakh tonnes), Karnataka 41 lakh tonnes (45 lakh tonnes) and other states 50 lakh tonnes (50 lakh tonnes). Due to this, the new sugar production at the national level is estimated to be limited to a mere 270 lakh tonnes by the end of this year’s early-ending crushing season, which is estimated to be 49 lakh tonnes less than last year’s final sugar production of 319 lakh tonnes.
Considering the sugar diverted to ethanol production and the sugar going out of the country through export routes, there is a possibility of low sugar stocks remaining at the end of the season.
Of course, this can have a favourable impact on the sugar sales rate at the factory level so that the outstanding bills of the factories, the bills of the sugarcane growers and other ancillary expenses can be paid by the factories on time.
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Source : Indian Cooperative
