Pune: Consumers can likely expect stable sugar prices in the coming months despite an anticipated decrease in sugar production, according to the Indian Sugar and Bio-energy Manufacturers Association (ISMA), reports The Times of India.
Deepak Ballani, the Director General of ISMA, stated that the country’s ample leftover sugar from previous years will help offset the expected drop in output. The association forecasts sugar production to fall to 26.4 million tonnes in the 2024-25 season (October to September), down from 29.9 million tonnes in the prior cycle.
Mr. Ballani explained that part of this reduction, around 2 million tonnes, is due to sugar being diverted for ethanol production. He also pointed to damage to sugarcane crops from unexpected rains in Maharashtra and a disease called red rot in Uttar Pradesh as reasons for the lower production.
Despite the dip, Mr. Ballani assured that India has a comfortable amount of leftover sugar in storage. He said this “will be enough to meet the country’s needs until the new harvest arrives in the market.”
He further noted, “The amount of sugar produced was sufficient to cover what India needs at home, exports, and the production of ethanol. This year, the government has allowed 1 million tonnes to be exported, with about 350,000 tonnes of that coming from Maharashtra.”
India had a much larger export allowance of 8-9 million tonnes in the 2023-24 season. By the end of September, the country had 8 million tonnes of sugar remaining in stock. Mr. Ballani highlighted that this large carry-forward amount means there’s enough sugar to cover domestic consumption for two months while waiting for the new supply. He added that typically, 4.5 to 5 million tonnes would be sufficient for this two-month period.
Looking ahead, ISMA anticipates that sugarcane production will rebound in Maharashtra and Karnataka in the 2025-26 season.
Mr. Ballani also mentioned that ISMA is urging the government to link the price sugarcane farmers receive (known as the Fair and Remunerative Price or FRP) with the prices of sugar and ethanol. He believes this would make sugar prices more competitive.
“Every time the price paid to sugarcane farmers is increased, the prices of sugar and ethanol should also be adjusted accordingly,” Mr. Ballani argued. He pointed out that the minimum selling price for sugar has remained at ₹31 per kilogram since 2019. Currently, the price sugar mills receive is even lower, ranging from ₹30-₹33 per kilogram in Maharashtra and ₹36 in Uttar Pradesh due to the large existing stocks at the start of the season. This, he said, is significantly below the average production cost of ₹41 per kilogram.
