Ethanol Diversion and Delayed Operations Impact Output

India’s sugar production dropped by 15.6% to 9,54 million tonnes between October and December 2024. This decline stems from an increased diversion of sugarcane for ethanol production, with 4 million tonnes estimated to be diverted this season, compared to 2,15 million tonnes last year. Delays in the start of sugar mills in Maharashtra and Karnataka further added to the dip.

Fewer Factories and Weather Disruptions Affect Crushing

The number of operational factories reduced to 493 in the first quarter, down from 512 last year. While crushing rates improved in major states like Uttar Pradesh, Maharashtra, and Karnataka, disruptions due to rains in Uttar Pradesh caused delays in transporting sugarcane to mills in December.

Sugar output declined across all major producing states during the first quarter:

• Uttar Pradesh: Output reduced to 3,28 million tonnes, down from 3,43 million tonnes last year.
• Maharashtra: Production dropped to 3 million tonnes, compared to 3,82 million tonnes previously.
• Karnataka: Output slipped to 2,04 million tonnes, a decline from 2,49 million tonnes.

ISMA Prepares for Updated Production Forecast

The Indian Sugar and Bio-Energy Manufacturers Association (ISMA) will release its second advance estimate of sugar production by January 2025. The first estimate projects total production for the season at 33,3 million tonnes, including sugarcane diverted for ethanol. Domestic consumption is also expected to decline slightly to 28 million tonnes from last year’s 29,1 million tonnes.

Domestic sugar sales during the first four months of the current season (October-January) are set at 9,2 million tonnes, 7,00,000 tonnes less than last year. This reduction follows the higher quotas released during 2023-24, partly due to increased demand during the general elections. ISMA forecasts average monthly sugar consumption at 2,35 million tonnes, with the remaining 18,8 million tonnes expected to cover the February-September period.

Conclusion

India’s sugar industry faces a season of adjustments, marked by ethanol production demands and slightly reduced domestic consumption. While the production decline raises concerns, the upcoming estimates from ISMA will clarify the outlook for the rest of the season. For now, the industry remains focused on balancing supply with evolving domestic and global market conditions.





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