Changing Trends in the Sugar Market
Sugar Season Production: The trends in the sugar market and industry in the country have been changing. While market experts were predicting a slowdown in sugar demand as the cold season begins amid the arrival of winter, some segments of the market were also predicting that consumer demand would remain good in the sugar market due to the wedding season. Meanwhile, Maharashtra is the leading state in sugar production in the country and with the recently concluded assembly elections in Maharashtra, the process of sugarcane crushing in the state for the new sugar season, which had slowed down, is now likely to pick up again, according to sugar industry experts.
Maharashtra Leads in Sugar Production
According to sources in the Sugar Commissionerate in Maharashtra, crushing licenses have been issued to about 174 to 175 sugar mills in the state for this season so far. And market experts said that such licenses will be issued to 24 to 25 more sugar mills soon.
In Maharashtra, as various politicians are involved in the sugar production sector, the activity in the crushing sector slowed down in the election atmosphere in the state, but experts were predicting that it will now accelerate. According to the latest news, 65 to 70 sugar mills in the state have started crushing operations. Meanwhile, according to sources in the Indian Sugar and Bioenergy Manufacturers Association (ISMA), sugar production in the current new sugar season of 2024-25 in the country is likely to be around 333 lakh tonnes. Which is about two to two and a half percent less than the previous sugar year.
Domestic Sugar Supply and Demand Dynamics
Sugarcane prices have gone up in the country. The Fair and Remunerative Price (FRP) of sugarcane has been increased by the government and against this, there has been no significant increase in sugar prices and restrictions on exports have also adversely affected the sugar industry.
The Rise of Grain-Based Ethanol
The new sugar season in India has recently started from October 1st and the country’s sugar stock at the beginning of the new season was estimated to be around 84 to 85 lakh tonnes. With this, assuming a production of 333 lakh tonnes, the total available domestic supply of sugar in the new sugar year 2024-25 is estimated to be around 417 to 418 lakh tonnes. On the other hand, assuming an annual domestic demand of 290 lakh tonnes and a diversion of around 40 lakh tonnes towards ethanol production, the country’s sugar stock at the end of the 2024-25 sugar season on September 30, 2025 is estimated to be around 87 to 88 lakh tonnes. This year, the country’s sugar production is estimated to decrease by around 7 to 8 lakh tonnes. A demand has also been submitted to the government for export approval of 2 million tonnes of sugar.
Government Interventions and Future Prospects
The competition of grain-based ethanol against sugar-based ethanol in the country has increased. Under the EBP program, the percentage of sugar-based ethanol in the total ethanol production in the country, which was 70 to 75 percent two years ago, has now come down to around 40 percent. Meanwhile, the government has recently announced a free sale quota of 2.2 million tonnes for sugar mills for December. A similar quota of 2.2 million tonnes was given in November as well.