The 2023-24 sugar season is almost over, barring the special season of Tamil Nadu and Karnataka. As per provisional figures of AgriMandi.Live Research, the season is expected to close with a net sugar production of 32 million tons. This is after considering the estimated sugar diversion of 2 million tons towards ethanol production in the current ethanol supply year which will conclude in October.
The ongoing season started with a carried-forward sugar stock of 5.18 million tons. Hence, the total sugar supply in the current season is expected to be at 37.18 millions tons (Opening stock of 5.18 million tons + sugar production of 32 million tons).
Now if we look at the total domestic sugar consumption in the current season and sugar exports under the bilateral trade agreement G2G (government to government), then the total demand/disappearance as per AgriMandi’s provisional figures is 29.50 million tons (expected domestic sugar consumption of 29 million tons + G2G sugar export of 0.50 million tons).
If we subtract the total sugar availability (37.18 million tons) in the season with total sugar consumption (29.50 million tons), then the provisional carried forward sugar stock would be 7.68 million tons, which is sufficient enough to cater for the domestic demand of the first three months until fresh sugar is added in the supplies.
What are the expectations from the new sugar season of 2024-25 which begins in just four months?
There are certain interesting estimates that AgriMandi.live research shows. As per the initial estimates of AgriMandi.live Research, the sugar production in 2024-25 SS is estimated to be lower (than the current season) on the back of drastic reduction in acreage in Maharashtra, Karnataka and other minor growing cane states.
Moreover, there are reports of red rot disease and incidence of top borer in major growing regions of Uttar Pradesh. AgriMandi.live research expects sugar production at 28.50 million tons after an estimated ethanol diversion of 3.50 mmt, a decline of net sugar production almost by 11% from the current season. With expected carried forward stock at 7.68 million tons, the total sugar supplies next year is seen at 36.18 million tons, a drop of 2.7% from the current season.
As per AgriMandi’s estimates, both domestic sugar consumption and sugar diversion towards ethanol production in the season 2024-25 are 29.60 million tons and 3.0-3.50 million tons respectively. Hence, the total sugar carried forward stock in the succeeding season i.e. 2025-26 SS is expected to be at 6.08 million tons (total sugar availability of 36.18 million tons – total sugar consumption of 30.10 million tons), which is almost 21% lower than that of the current season.
As global prices fell significantly, Indian sugar is at a disparity at the current prices. So, as per the global fundamentals, raw sugar prices are expected to fall further which is likely to take India out of the export market for the 2024-25 season.
If the Indian government allows exports of 1.0 mmt, then there are more chances that global prices will tank further.
| Narration | 2023-2024 | 2024-2025 | % |
| Opening Stock | 5.18 | 7.68 | 48.30 |
| Production | 32.00 | 28.50 | -10.90 |
| Imports | 0.00 | 0.00 | 0.00 |
| Total Supply | 37.18 | 36.18 | -2.70 |
| Domestic Consumption | 29.00 | 29.60 | 2.10 |
| Export | 0.50 | 0.50 | 0.00 |
| Total Consumption | 29.50 | 30.10 | 2.00 |
| End Stocks | 7.68 | 6.08 | -20.80 |
| Sugar to Ethanol | 2.00 | 3.0 to 3.5 |
- Numbers are in MMT (Million Metric Tons)
The projected balance sheet for the sugar market in 2024-25 indicates several important trends: a decrease in production, a slight increase in consumption, and a significant rise in the conversion of sugar to ethanol. These changes will result in tighter market conditions, as evidenced by the declining stocks-to-use ratio.
Rahil Shaikh, MD, MIER Commodities, takes a contrarian view. Rahil Shaikh feels that total sugar production in 2024-25 is expected to be around 33 million tons and net sugar production around 30 million tons.
“If we have a closing stock of around 8 million plus as estimated by the Government, then total sugar diversion next year could be in the range of 3 million tons. However, in case the closing stock is below 8 million, then we can expect sugar diversion of around 2.50 million tons”, he said.
Shaikh further adds that the top priority of the Government will be to have sufficient sugar availability in the domestic market, then ethanol blending and lastly if there is surplus sugar available, then sugar exports might be allowed. Premium-wise, if we look, then ethanol price is fetching the highest prices to the sugar mills, followed by the domestic market and then the international market.
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