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India's sugar output sees a slight dip of 1.2% from the previous year, standing at 255.38 lakh tonnes until February, attributed partly to government restrictions on ethanol. While Maharashtra and Karnataka experience slower mill closures, Uttar Pradesh sees a rise in production. However, Gujarat, Tamil Nadu, and other states witness declines in sugar output, posing challenges to the industry's overall performance.

Highlights

Decline in Sugar Output: India's sugar output from October to February stood at 255.38 lakh tonnes (lt), marking a 1.2% decrease compared to the previous year, according to ISMA.

Government's Ethanol Curbs: Government restrictions on ethanol have led to increased sugar production, ensuring ample availability until the next season. However, clarity on ethanol production from B-Heavy molasses is expected by mid-April.

Factory Operations: As of February 29, there were 466 operating sugar mills, up from 447 mills in the same period last year, indicating sustained activity in the sector.

Closure Rate in Maharashtra and Karnataka: The rate of closure of mills in Maharashtra and Karnataka is slower compared to last year, suggesting a potentially longer crushing season in these states.

Nationwide Factory Closures: Across India, 65 factories ceased crushing operations by the end of February, a decrease from 86 closures during the same period last year.

Regional Production Trends: Sugar production in Maharashtra and Karnataka declined, while Uttar Pradesh reported higher output. Gujarat and Tamil Nadu also saw decreases in sugar production.

Performance of Other States: Bihar, Haryana, Punjab, and other states collectively produced less sugar compared to the previous year, contributing to the overall decline in national sugar output.

Conclusion

Despite facing hurdles such as government policy constraints and varying regional production trends, India's sugar industry demonstrates resilience with sustained factory operations and strategic measures to ensure adequate sugar availability. The slower closure rate of mills in Maharashtra and Karnataka hints at a potentially extended crushing season, offering hope for improved output. However, continued vigilance and proactive measures are essential to address challenges and sustain the industry's growth trajectory amidst fluctuating market dynamics.

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