India allots 2.35 mt of sugar for Sept, total offtake estimated at 29.1 mt for 2023-24 season

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With the Centre allocating 2,35 million tonnes (mt) of sugar as September quota for sales in open market, India’s sugar consumption during 2023-24 season (October-September) is estimated at a record 29.15 mt against 27.65 mt in the previous season.

“Monthly domestic sugar quota for September 2024 is 2.35 mt”, the Food Ministry posted on social media platform X (formerly Twitter). The Ministry is expected to release the detailed mill-wise allocation in a day or two. Sources said in the September allocation, there has been a cut in normal eligible quota of some mills for selling higher than the allotted quantity during June-July.

In May, businessline reported that India’s sugar consumption will likely rise to a record in the 2023-24 season as there has been an unprecedented demand due to severe heatwave and election campaign across the country.

Every month, the Food Ministry decides the sugar sales quota under a formula based on previous production and sales record. It also allocates quantity that each mill is supposed to sell. Any unsold quantity is added in the following month’s quota if there are valid reasons for a mill not being able to sell the allotted quantity.

More realistic now

Earlier, the actual consumption estimate was not reflected in the allocation, which used to be lower, whereas over the past 2-3 years it is more realistic. Even sugar mills owners also realise that the allotted quantity is as per demand.

The allotted quantity of sugar in the 2019-20 season was 24.3 mt, said Chini Mandi’s Uppal Shah. This means the consumption of sugar has grown 20 per cent in last five years. In contrast, the sugar production (after diversion to ethanol) has increased 17 per cent – from 27.41 mt in 2019-20 to 32 mt in 2023-24.

The Agriculture Ministry has fixed a target of 470 mt of sugarcane production during the 2024-25 crop year (July-June), which will be available for crushing in the sugar season 2024-25. Even if the target is achieved, it may lower the sugar production in the next season to about 31 mt due to higher commitment for ethanol.

Against a diversion of about 3.8 mt of sucrose for ethanol in the 2022-23 season, it may be around 2 mt in the current season. As the ethanol blending with petrol (EBP) rate has been fixed higher at 15 per cent for current year ending October 31, the oil market companies have started blending at 15 per cent from May.