Traders have projected a decline by half in sugar exports of India in the upcoming marketing year from October. They added that domestic sugar prices may not be disrupted as sufficient stocks of sugar are available for domestic consumption.
In the 2021-22 season (October to September), India exported a record high of 11 million tons of sugar. The production during the same year was 36 million tons of sugar. The output of sugar during the current season is estimated at 33 million tons, expecting the exports may fall by 6 million tons.
In July, the Indian Sugar Mills Association (ISMA) predicted 36.2 million tons of sugar production in the 2023-24 season. Out of this expected 36.2 million tons of sugar, 4.5 million tons will be used in the production of ethanol. The result will be 3% lower year-on-year. The expected domestic consumption for the 2023-24 season is 27.5 million tons of sugar. So the surplus would be around 4.2 million tons which is not likely to be exported.
Mr. Praful Vithalani, the All India Sugar Trade Association chairman, said, “The total sugar production is expected to drop because of a shortfall in sugarcane in Maharashtra and Karnataka. Uttar Pradesh is, however, doing better.”
Wholesale Prices of Sugar
The price of wholesale sugar has risen to Rs. 37 per kg in Maharashtra and Rs. 39 per kg in Uttar Pradesh, this surge is expected as the low sugar production may hit in the next season. Mr. Praful Vithalani pointed out that prices may usually spike during the off-season from May to October.
In July, ISMA predicted an 8% drop in the production of sugar in Maharashtra and a 10% decline in the output of sugar in Karnataka whereas it is expected to increase by over 7% in sugar production of Uttar Pradesh, the largest sugar-producing state in India.
The price of sugar in the global market is still Rs. 25-30 more expensive than the domestic prices of sugar because of the low sugar output in Thailand and China. Although the sugar production of Brazil in this season is expected to be good
Interpretation
To sum it up, sugar production in India is forecasted to decline in this season due to unpredicted weather. This decline in sugar output will decrease the sugar exports of India, maintaining the domestic supply demand for sugar.
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