Sugar production in the 2022-23 season (October-September) is estimated to decline by 7% to 33.5 million tonne (MT) from the previous year’s 35.9 MT, mainly, due to lower cane yield in Maharashtra and Karnataka. Unseasonal rains during October last year have led to a drop in cane yield in both states.
Maharashtra, the biggest sugar-producing state, has cut the estimate for the sweetener’s production by 9% to 12.5 MT. Karnataka’s sugar production this year is estimated at 5.5 MT, 14% less than the previous year.
Industry sources said sugar production in Uttar Pradesh, the second biggest producer, this year is expected to be around 10 MT, almost the same as last year’s output. Tamil Nadu, Andhra Pradesh, Odisha, Gujarat, Bihar, Haryana, Goa, and Punjab are the other sugar producing states.
“Lower sugar production in the current year is unlikely to result in a spike in domestic prices,” Prakash Naiknavare, managing director, National Sugar Federation (NSF), told FE. He said that domestic demand for sugar is around 27 MT annually.
Naiknavare said due to rains in October the cane crop in Maharashtra and Karnataka did not get adequate sunlight and this adversely impacted the yield in both the states.
Meanwhile, according to Indian Sugar Mills Association (ISMA), the sugar output for the 2022-23 season (October-September) is estimated to be around 34 MT which excludes around 4.5 MT to be diverted towards production of ethanol.
In October last year, after considering the diversion of 4.5 MT for ethanol, ISMA had pegged the sugar production at 36.5 MT, which was revised downwards last month.
ISMA has stated that around 505 mills were in operation till February 15 against 522 mills in the previous year.
The blending of ethanol with petrol stood at 10% in the previous year and it is expected to increase to 12% in 2022-23.
Official sources said that the government has decided not to approve a second tranche of sugar exports beyond 6 MT approved for the current season. This follows inputs received by the food ministry on the crop prospects from the various key sugarcane producing regions.
Out of the approved 6 MT of sugar exports in the first half of the marketing season, India has exported close to 3 MT of sweetener so far. Indonesia, Bangladesh, United Arab Emirates and Djibouti are the major destinations for sugar exports.
Trade sources had earlier anticipated that the government would allow an additional 2 – 3 MT of sugar exports in the second tranche in the current year ending on September 30, 2023.
Sugar exports stood at 11.2 MT in the 2021-22 marketing year. In sugar seasons 2017-18, 2018-19 and 2019-20, only about 0.6 MT, 3.8 MT and 5.9 MT of sugar was exported.