The global market cannot expect to get sugar at a cheaper rate from India this season, an Agriculture Roundtable on Sugar and Ethanol held during the weekend was told.
“The world market will have to offer higher prices. Otherwise, the sugar will be used in the domestic market,” said Ravi Gupta, Executive Director at Shree Renuka Sugars.
The roundtable, organised by Acuro AI, saw the participants expressing their views on sugar production in India for the 2024-25 season and whether the industry will be able to export the one million tonnes permitted by the government.
So far, 3 lakh tonnes of the quota had been traded and two lakh tonnes of the contracted sugar had begun moving out fast, Gupta said.
Labour shortage
Stating that the next two months will be crucial for sugar production, he said two of Shree Renuka’s sugar plants have been closed and other units are “closing fast”. Production was 25 per cent lower than initially estimated, he said.
Prerna Sharma, Sugar and Ethanol Analyst at Tropical Research Services, said the 2024-25 sugar season was turning out to be “very challenging”. Sugar yield is low this year as the season began early and the industry faced a labour shortage, particularly due to elections in Maharashtra.
Pegging sugar production at 27 million tonnes (mt), she said this is the worst in the past 8 years. Domestic prices have increased by 10 per cent after the Centre allowed sugar exports.
However, Sharma was not optimistic about the industry exporting the quota because of slack demand in buying countries. India could end up exporting 4.5-5 mt, she said.
Obstacle to exports
Mill closures are gathering pace with 35 already shutting operations in Solapur and Marathwada regions of Maharashtra. By the end of this month, 50-55 mills could end their operations in Maharashtra, said Sharma.
Praful Vithalani, Director, Jagjivan Keshavji Trading Company Pvt Ltd, said the government could have postponed its decision to allow exports by a month or till February 28, irrespective of data.
He said sugar production was likely to be 26.5 mt and the export decision has helped the industry. Stating that the domestic market was an obstacle to the shipment of the commodity, Vithalani was hopeful that the Centre would not ban exports suddenly like it did during the United Progressive Alliance (UPA) regime in 2006.
“A lot of deals had been signed then and the ban affected the industry. I hope the production figures will not force the government to announce a sudden ban,” he said.
Consensus on output
Gupta of Shree Renuka did not rule out such a possibility but Mohan Narang, Director, KS Commodities Ltd, said the Centre may not resort to such a step midway.
Narang said there was consensus on sugar production of 26.5 mt for this season. At least 2.5 lakh tonnes of sugar have been sold for exports besides 2-3 vessels. Demand for Indian sugar continues at $540 a tonne, while ex-mill prices in the domestic market were ₹43,750 a tonne.
“I don’t see any issue with $535 a tonne f.o.b. Sugar prices in the domestic market have come below ₹37 a kg to ₹36-36.50 in Maharashtra (after the initial rise once exports were permitted),” he said.
Rahil Shaikh, Managing Director, MEIR Commodities India Ltd, said going by the government’s estimate of 8 mt of opening stock, production of 27 mt, consumption of 29 mt and exports of 1 mt tonne, there would be at least 5 mt of sugar available during the October-November 2025 offseason.
37 mt output next season
“There is enough demand overseas. The one mt exports will go,” he said.
Though Centre has not raised the minimum selling price of sugar, the export permission lifted sugar prices to ₹38 a kg in Maharashtra and ₹40 in Uttar Pradesh.
Production in the 2025-26 season could be 37 mt and India should leverage at least 3,00,000 tonnes next year with a monthly export quota, said Shaikh.
The export decision was timed “perfectly” ahead of Ramadan, he said adding that the Centre should consider increasing prices of supply of sugarcane juice or molasses for the manufacture of ethanol.
Roshan Lal Tamak, ED and CEO, DCM Shriram Ltd, said satellite mapping and remote sensing can get a nearly accurate estimate of sugarcane, sugar production and sucrose content.
Deepak Pareek, Chief Advisor, Acuro, moderated the roundtable.
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