Sugarcane output target fixed at 470 mt, more ethanol may lead to lower sugar

After the agriculture ministry fixed a target of 470 million tonnes (mt) of sugarcane production during 2024-25 crop year (July-June), it is estimated that the sugar production in next season may see a decline from current year, potentially requiring government intervention to make sugar prices stable.

“The sugarcane target for next year is lower that actual production of 490.53 mt in 2022-23 when the sugar production was about 33 mt in 2022-23 sugar season (October-September) and diversion to ethanol was about 4 mt. When the ethanol blending with petrol (EBP) rate is supposed to go up next season to 20 per cent, it is unlikely to see higher sugar production from lower cane output, unless there is government intervention,” an industry expert said.

Considering that the agriculture ministry is aware of the area sown with sugarcane, which will be released with the weekly Kharif acreage updates, the production target is set based on practical possibilities, sources said. The first estimate of sugarcane production, along with other crops for next year, will be announced in September, the sources added.

No shortage

Assuming the cane production level of 470 mt, the output of sugar and sucrose-for-ethanol together will be around 36.2 mt as average 70 per cent of sugarcane is crushed by sugar mills whereas the recovery is around 11 per cent, depending on weather conditions. Even if maximum 5 mt is diverted for ethanol, the sugar production may not be lower than 31 mt. The production in current season may be around 32 mt, excluding the quantity diverted for ethanol.

“There will not be shortage even if the domestic consumption rises to 30 mt as the surplus stock from this season for 2024-25 may be between 2.5 mt and 3 mt,” the industry expert said. However, the government has to take a cautious approach in allocating quantity for ethanol as it has done this year, the expert added.

But, Ravi Gupta, Chairman of export and ethanol committee of All India Sugar Trade Association (AISTA), said that it is too early to hazard a guess for sugarcane next year. “There shall be enough sugar for ethanol next year as we shall be carrying 3 mt surplus from this year, over and above, minimum stock required,” he said.

“Marathwada in Maharashtra and Karnataka have already received pre-monsoon shower and the weather bureau has predicted above average rainfall,” Gupta said adding these are all positive for the crop yield.

India’s sugar consumption in 2023-24 season is likely to reach a record over 29 mt against 28 mt in 2022-23. The government has restricted sugar export which is only allowed to friendly countries on diplomatic requests.