Sugar production in Maharashtra in the current season seems to have exceeded expectations. The State has already produced around 106 lakh tons of sugar, with several sugar mills still crushing sugarcane. This improvement in sugar production can be attributed to better yield than excepted and less diversion of sugar to ethanol. This will increase the overall sugar stock availability in the country, which is imperative to maintain demand and supply dynamics and keep prices from spiralling up.
The sugar produced in the current season will be carried forward to the next season and as per normative requirement, the country needs to have at least 60 lakh tons of sugar as opening stock, so that it can meet the initial sugar consumption demand until fresh sugar gets produced in the new season.
Recently, ISMA revised the total sugar production of the current season to 340 lakh tons. After considering a sugar diversion of 17 lakh tons as allowed by the Government, the total sugar available in the country is 323 lakh tons. Hence the total sugar available in the country is 379 lakh tons (sugar production of 323 lakh tons+56 lakhs tons as opening stock). If we deduct the expected sugar consumption of 283 lakh tons, the total sugar available in the country is 96 lakh tons. This is much higher than the normative requirement of sugar season.
This should give enough elbow room to the Government to reconsider the total sugar diversion toward ethanol production in the current season. By allowing additional sugar stocks to be diverted to ethanol, sugar mills can capitalise on the value of sugar for revenue generation, thus mitigating the impact of lower domestic sugar prices while also optimising ethanol production capacity.
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