An important agro-based industry, sugar is a big business in India. Around 50 million sugarcane farmers and 5 lakh workers are directly employed in sugar mills in the country. Employment is generated through ancillary activities pertaining to transport, servicing of machinery, and supply of agricultural inputs as well.
There are around 525 mills churning out more than 30 million tonnes of sweetener. India is the second-largest producer after Brazil; it is also the largest consumer. At present, the annual output of the Indian sugar industry is approximately around Rs. 80,000 crores.
The production is expected to increase by 2.9% in the ongoing 2021-22 marketing year, according to AISTA (All India Sugar Trade Association) sources. The supply is ample to cater to domestic consumption, estimated to be around 27 million tonnes in the 2021-22 marketing year. The sugar marketing year is calculated from October to September.
The production of the sweetener reached 11.6 million tonnes (mt) till 31st December’21 in India, according to a press release of the Indian Sugar Mills Association (ISMA). Uttar Pradesh generated around 3.1 mt, which was a decline of 22 percent year-on-year.
According to the data published by the Indian Sugar Mills Association (ISMA), the country has produced 151.41 lakh tonnes of sweetener between October 1, 2021, and January 15, 2022, of the current 2021-22 marketing year. This amount is higher than the 142.78 lakh tonnes produced in the corresponding period of the previous year.
Sugar mills in Maharashtra have produced 58.84 lakh tonnes till January 15, 2022, which is higher than the 51.55 lakh tonnes of the previous year. Production in Karnataka also increased from 29.80 lakh tonnes to 33.20 lakh tonnes as of January 15, 2022.
Rebounding Demand Pushes Indian Bulk Sugar Industry Forward
The forced lockdown had adversely impacted the bakery, savory snacks, and functional food products which had passed on to the sugar industry. Now, with the availability and widespread use of vaccines, sectors using sugar such as confectionery and beverages have started bouncing back to normal. Entrepreneurs and global exporters have again started looking for the availability of high-quality online sugar in various trade portals.
Demand for fast food, quick pick food, in developing countries due to busier lifestyles has also accelerated activities in the FMCG sector in general and sugar markets in particular. The sentiments in the markets have been quite positive with demand being witnessed from several quarters.
Sugar prices in India have risen to almost ₹200/Quintal and the industry is also witnessing a hike in Minimum Selling Price (MSP) from ₹3100/MT for over 30 months to ₹3450-3500/MT in sugar season 2020-21. This price trend will help the mills pass on the higher cane price payments to farmers in the current as well as upcoming sugar season.
Export from India: Sugar Export Countries
According to the reports of the industry body ISMA (Indian Sugar Mills Association), the exports of sugar from India increased 20% to 17 lakh tonnes in 2020-21 from 4.5 lakh tonnes of sugar exported in the same period the previous year, fueled by high export demand. Till January 2022, around 38-40 lakh tonnes of sugar have been contracted by mills for export. Indian sugar mills are currently waiting for the global prices of sugar to increase before signing on any deals.
The global price of raw sugar is around 18 cents/pound, a 5-month low abetted by the news of expectedly better upcoming season 2022-23 in CS Brazil.
Countries Buying Sugar from India
In July 2021, the Sri Lankan government resolved to import Indian sugar to stabilize commodity prices in the country. The Cabinet of the country allowed the import of 2500 tonnes of sugar per month, on recommendations of the trade minister. Indonesia which is the largest importer of raw sugar is emerging to be another significant buyer of Indian sweeteners in 2021. According to the data released by the Indian Sugar Mills Association (ISMA), Indonesia along with Afghanistan were responsible for around 48 percent of the total Indian sugar exports of 29.72 lakh tonnes shipped during the period October 2020 – March 2021.
