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India's sugar production faces a 10% dip to 33.05 million tonnes in 2023-24, led by Maharashtra and Karnataka. Despite challenges, optimistic ethanol diversions and strategic stock management offer a sweet spot for the industry, hinting at a resilient comeback

Highlights

Indian Sugar Production Decline: The Indian Sugar Mills' Association (ISMA) estimates a 10% decrease in sugar production for the 2023-24 season, projecting an output of 33.05 million tonnes compared to 36.62 million tonnes in the previous season.

Regional Variances: The decline is attributed to expected decreases in sugar production in Maharashtra (9.99 mt from 11.85 mt) and Karnataka (4.97 mt from 6.58 mt). However, Uttar Pradesh is anticipated to increase production to 11.99 mt from 11.89 mt.

Ethanol Diversion: The government has approved the diversion of 1.7 million tonnes for ethanol production from sugarcane juice/B-heavy molasses for 2023-24, potentially reducing net sugar production to around 31.35 million tonnes.

Closing Stocks Projection: With an opening stock of 5.6 million tonnes, domestic consumption of 28.5 million tonnes, and estimated net production of 31.35 million tonnes, ISMA projects comfortable closing stocks of around 8.45 million tonnes as of September 30, 2024.

Ethanol Production Expectations: ISMA expresses optimism that the government might allow an additional 1.8 million tonnes of sugar diversion for ethanol production in the current Ethanol Supply Year, ensuring sufficient closing stocks to cater to the next season.

Production Updates: From October to January, 18.72 million tonnes of sugar were produced, compared to 19.5 million tonnes in the same period the previous year.

Crushing Statistics: As of January, a total of 192.8 million tonnes of sugarcane were crushed nationwide, resulting in 18.7 million tonnes of sugar production, with an average recovery rate of 9.71%.

Regional Crushing Figures: Maharashtra crushed 67.6 million tonnes of sugarcane with a recovery rate of 9.60%, producing 6.5 million tonnes of sugar. Uttar Pradesh reported crushing 57.4 million tonnes with a 10.5% recovery, yielding 5.77 million tonnes of sugar. In Karnataka, 37.7 million tonnes of sugarcane were crushed, producing 3.7 million tonnes of sugar with a recovery rate of 9.75%.

Conclusion

The sugar industry grapples with regional setbacks, but the potential ethanol infusion and adept stock management signal a resilient recovery. As India navigates the intricate balance between sugar and ethanol production, the industry holds promise, ensuring a stable and strategic future amidst fluctuating harvests and evolving government policies.

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