The Indian Sugar Mills Association (ISMA) has estimated that India’s sugar consumption for the 2024-25 marketing year, which runs from October to September, is likely to be 28 million tonnes. This is a reflection of steady domestic demand despite challenges in sugar production, which has seen a notable decline in the current season.
Production Challenges Across Major States
Production of sugar in India for the first quarter of the 2024-25 marketing year has fallen by 16%, at 9.54 million tonnes, down from 11.3 million tonnes in the same period last year. It is because of the unfavorable weather and delayed crushing that took place in key sugar-producing states such as Maharashtra and Karnataka. Maharashtra alone, the largest sugar producer in the country, saw a sharp decline in production due to extended monsoon rains that disrupted sugarcane harvests.
Uttar Pradesh is the second largest sugar-producing state, and crushing rates have been better this year. However, unseasonal rains during the last week of December 2024 have created temporary disruptions to cane supply to mills. Karnataka, another significant contributor, had reduced output owing to delayed planting and adverse climatic conditions.
ISMA’s Response and Official Statement
In response to these developments, ISMA has decided to utilize satellite imagery in January 2025 to reassess the areas of sugarcane crops and update production estimates by the end of the month. The association stated, “The current decline in production is worrying, but steps are being taken to assess the situation and explore measures to balance supply with growing domestic and international demand.
Besides this, ISMA pointed out that domestic sugar consumption, on an estimate, was always stable at around 28 million tonnes despite the shortfall in production. This further indicates that balance in sugar export and ethanol production would avoid market disruption.
Background: Ethanol Production as a Stabilizer
Ethanol production has been vigorously promoted by the Indian government in the larger framework of biofuel policy. In order to minimize pressure on the domestic supply of sugar, to maintain price stability, and to have an alternate revenue stream for the sugar mills, the policy attempts to divert excessive sugarcane towards ethanol manufacture. It was an essential ingredient in handling sugar surplus during earlier years and promises to play an important role during the current season as well.
India is also committed to its export commitments, which could be jeopardized if the production shortfall continues. India exported around 6.1 million tonnes of sugar in the 2023-24 season, which is unlikely to be repeated in the current marketing year.
Facts and Figures
- Production Decline: 9.54 million tonnes in Oct-Dec 2024 vs. 11.3 million tonnes in the same period last year (Economic Times).
- Ethanol Policy Impact: A portion of sugarcane diverted to ethanol production helps mitigate the sugar surplus (Reuters).
- Key Producers: Maharashtra, Uttar Pradesh, and Karnataka collectively contribute over 80% of India’s sugar output.
Way Forward
Stakeholders in the sugar industry are optimistic about recovery, depending on weather conditions and government interventions. Effective pest and disease control, timely irrigation, and favorable climatic patterns will be critical for ensuring a stable sugarcane supply. ISMA’s forthcoming production estimates in late January will provide further clarity on the season’s trajectory.
The government and industry players are expected to increase efforts toward strengthening the ethanol blending program, which aligns with India’s energy diversification goals and provides a sustainable solution to the current sugar production challenges.
By leveraging advanced technology and policy measures, India aims to overcome short-term hurdles and maintain its status as a global leader in sugar production and exports.
BY – NIKITA
