The country’s sugar production is projected to be 36.5 million tonnes in the 2022-23 marketing season, an increase of 2 percent compared to the year-ago period, according to the Indian Sugar Mills Association (ISMA), a producers’ body. The marketing season will be starting this month.
India, the world’s biggest sugar producer and the second biggest sugar exporter behind Brazil, churned out around 35.8 million tonnes of the sweetener in the 2021-22 season which is from October-September. Mills will produce around 36.5 million tonnes of sugar during the current season after diverting 4.5 million tonnes of sugar for ethanol production.
With an estimated increase in production despite higher diversion for ethanol, ISMA expects sugar exports to be around 9 million tonnes this season. Releasing the first estimate, the Indian Sugar Mills Association (ISMA) said, “after accounting for the reduction of 45 lakh tonnes in sugar production due to diversion of cane juice/ syrup and B-molasses to ethanol, ISMA estimates sugar production in 2022-23 at around 36.5 million tonnes of sugar.”
Sugar output in Uttar Pradesh is estimated to be 12.3 million tonnes, Maharashtra at 15 million tonnes, and Karnataka at 7 million tonnes during the 2022-23 season. Since the target of 12 percent blending is expected to be achieved, sugar diversion towards the production of ethanol is estimated to be higher by 32 percent at 45 lakh tonnes in the current season as against 34 lakh tonnes during the 2021-22 season.
A total of about 545 crore liters of ethanol would be required and supplied during the current season, ISMA said.
‘The Curbs’ Now Bearing Fruit
In an effort to keep prices under control, the Indian government, last June, put restrictions on the export of sugar. The decision was taken in view of the sugar prices back then in the country and was aimed at maintaining domestic availability amid rising food and fuel prices. However, the ‘sugar situation’ seems to be improving with the beginning of the new marketing year this October.
The Government of India’s decision to curb Sugar Exports while prioritizing domestic needs, have allowed the sky-high sugar prices in the local market to settle down and has also allowed the producers to fill up their stocks. Furthermore, there is a need for the Government of India to supplement the demands for its distribution programs wherein sugar and other food grains are distributed to a section of the population.
Now, it looks like India’s decision to limit sugar exports seems to have served its purpose. The prices are stabilizing and there is now a sufficient reserve. This prompted the Government of India to ease the restrictions and now the government is planning to release the sugar export policy.
On exports, ISMA said the window of timeline for exports appears to be quite short for Indian sugar this year as Brazil sugar will hit the global market by May 2023. Further, most mills have already contracted sugar for export supplies in the current season. So, an early announcement of the sugar export policy by the government would be welcomed by millers.
Sugarcane crushing has started in the southern region and is expected to start soon in other regions also. Therefore, a better picture would emerge after a few months when the actual trend of yields and sugar recoveries would become available. As has been the practice, ISMA will again review the sugarcane and sugar production estimates in January 2023.