The Indian Sugar Mills Association (ISMA) has revised its sugar production estimate for the 2024-25 season to 27.27 million tonnes (MT), down from 31.96 MT in the previous season. This decline is attributed to lower sugarcane yields in key states like Uttar Pradesh, Maharashtra, and Karnataka due to red rot infestation, varietal changes, and early flowering. The estimated diversion for ethanol remains at 3.75 MT. Domestic sugar consumption is projected at 28 MT, exports at 1 MT, and closing stocks at 6.25 MT. As of January 31, sugar production stood at 16.5 MT, compared to 18.72 MT in the previous year. The government has allowed 1 MT of sugar exports despite the lower production.
Key Highlights
# ISMA revised sugar output estimate to 27.27 MT for 2024-25.
# Major states report lower yields due to red rot and early flowering.
# Ethanol diversion pegged at 3.75 MT for the season.
# Sugar production as of Jan 31 stood at 16.5 MT, down from 18.72 MT last year.
# Government approved 1 MT sugar exports despite lower production.
ISMA’S latest estimate, pegs India’s sugar production at 27.27 million tonnes (MT) for the 2024-25 season, down from 31.96 MT in the previous season. The downward revision reflects supply concerns, which may support domestic sugar prices in the coming months. With domestic consumption estimated at 28 MT and exports at 1 MT, stock levels could tighten, leading to possible price volatility.
Supporting the price performance, ISMA highlighted several factors contributing to lower sugar output. In Uttar Pradesh, sugarcane yields have dropped due to red rot infestation and varietal replacement. Similarly, Maharashtra and Karnataka reported lower yields caused by early flowering, linked to excessive rainfall affecting sunshine hours. Additionally, industry estimates suggest a possible increase in ethanol diversion, further limiting sugar availability in the domestic market.
On the policy front, the government recently permitted 1 MT of sugar exports, which could impact supply further. Meanwhile, as of January 31, India’s sugar mills had produced 16.5 MT, significantly lower than the 18.72 MT recorded during the same period last year. ISMA’s projected sugar balance sheet suggests a closing stock of 6.25 MT by September 30, 2025.
Given the lower production estimates and ongoing ethanol diversion, sugar prices may witness upward pressure in the near term. Market participants will closely monitor further production updates and policy measures to assess future price trends.
Finally
With lower production estimates and tightening supply, sugar prices could remain firm. Ethanol diversion and export policies will play a crucial role in shaping future price trends.