Sugar Output Declines as Weather, Disease Impact Crops

India’s sugar production is expected to fall 17% to 26,52 million tonnes in the 2024-25 season, according to the All-India Sugar Trade Association (AISTA). This drop, from 31,90 million tonnes in the previous season, is due to a combination of adverse weather and disease outbreaks in key sugarcane-growing regions. The trade body also predicts closing stocks at 4,50 million tonnes by September 30, 2025.

If these estimates hold true, India’s sugar stocks will drop below two months’ worth of domestic demand for the first time in years. The sugar industry estimates that October-November demand will reach 4,80-5,00 million tonnes due to festival consumption.

Ethanol Diversion Affects Sugar Supply

AISTA factored in 4 million tonnes of sugar diverted for ethanol production when calculating this season’s sugar output. “Sugar production in Uttar Pradesh has taken a hit due to red rot disease in the western region and flooding in the east, which lowered sugar recoveries,” said AISTA Chairman Praful Vithalani.

In Maharashtra, erratic rainfall and flowering issues in sugarcane plants have caused farmers to see lower yields. Additionally, sugar mills in the state are expected to shut down earlier than usual due to increased crushing capacity, even though the number of operating mills is lower than last year.

Domestic Sugar Consumption and Exports

AISTA projects domestic sugar consumption at 29 million tonnes and exports at 1 million tonnes this season. With carryover stock from 2023-24 at 7,98 million tonnes, total sugar availability in India (excluding exports) will be 33,50 million tonnes.

AISTA organized a seminar on January 25 in Mumbai, where 100 participants, including sugar mills, refineries, traders, and analysts, discussed sugar production estimates.

Lower Sugarcane Crushing and Production Data

According to the National Federation of Co-operative Sugar Factories (NFCSF), India crushed 148,21 million tonnes of sugarcane between October 1, 2024, and January 15, 2025. This marks an 8% decline from 161,28 million tonnes crushed in the same period last year. Sugar production during this timeframe also dropped 13,65%, with 13,06 million tonnes produced compared to 15,12 million tonnes last year.

As of January 15, 507 sugar mills are operating across India, compared to 524 last year. While Uttar Pradesh has slightly more mills running (122 compared to 120 last year), Maharashtra’s operational mills have dropped from 206 to 196. Karnataka, however, saw a small increase, with 77 mills operating versus 74 last year. These three states contribute over 80% of India’s sugar output.

What Should Sugar Traders and Buyers Do?

Given the anticipated drop in production, sugar prices could increase in the coming months. Traders should monitor supply trends closely and consider securing stocks before prices rise. Buyers should prepare for potential price hikes, especially ahead of the festival season. For now, the government’s response to stock levels and ethanol diversion will be key factors in determining market trends.





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