Sugar production in March meets ISMA expectations, sugar body targets two million tonnes exports

As India's sugar production exceeds domestic consumption estimates, the Indian Sugar and Bio-Energy Manufacturers Association (ISMA) seeks to export to sustain industry stability and financial liquidity. 

"With favourable weather conditions and increased FRP projected to boost production, the apex sugar body estimates strong closing stock, advocating for strategic exports to benefit farmers, mills, and the economy," said ISMA.

According to ISMA, India's sugar production has reached around 314 lakh tonnes as of April 2024. With an additional output of 5-6 lakh tonnes expected from mills in Karnataka and Tamil Nadu, the final net sugar production is estimated to be close to 320 lakh tonnes.

ISMA informed that Overall, 516 factories have completed their crushing operations in the country, compared to 460 closed last year (2023) as of April end, the number of operational factories was 16, 57 fewer than last year; 73 mills were functioning the previous year on the same day.

Since some factories in Karnataka and Tamil Nadu will operate special season during June – September, they are expected to collectively contribute around 5 – 6 lakh tonnes of sugar. Therefore, the final net sugar production (after diversion) for the season would be around 320 lakh tonnes, as estimated by ISMA in March 2024.

Taking into account an opening stock of approximately 56 lakh tonnes as of October 1, 2023, and a forecasted domestic consumption of 285 lakh tonnes for the season, ISMA projects a significantly higher closing stock of 91 lakh tonnes by September 30, 2024. This estimate, amounting to 36 lakh tonnes above the normative stock of 55 lakh tonnes, can potentially lead to additional costs for the millers on account of idle inventory and carrying costs.

The country's premier sugar organisation also expects a moderate crushing season in 2024-25 due to several factors, including the early announcement of an increased Fair and Remunerative Price (FRP) for sugarcane, favourable pre-monsoon rainfall, and forecasts indicating an above-normal monsoon. These factors are further expected to lead to a higher stock in the coming year.

In light of these projections, ISMA has urged the government to consider permitting the export of 20 lakh tonnes of sugar in the current season. This would not only ensure sufficient stocks for domestic consumption and the Ethanol Blending Program (EBP) but also improve the financial liquidity of sugar mills and enable timely payments to farmers. ISMA believes that allowing exports will contribute to the smooth functioning of the sugar industry and foster economic stability.

ISMA Director General Deepak Ballani's views
"We are pleased to report positive production figures for the sugar industry this year. The projected estimate of sugar production successfully highlights the collective efforts of our stakeholders and the industry's resilience. The financial well-being of sugar mills and timely payments to farmers is paramount to the smooth functioning of the industry. Hence, we urge the Government to consider permitting the export of 20 lac tonnes of sugar in the current season, which will not only benefit the industry but also contribute to the welfare of cane farmers. We, at ISMA, remain committed to working towards the betterment of sugarcane farmers and the sustained growth of the sugar industry in India."