India's sugar production estimate has been revised upward by 3% to 314.5 lakh tonnes for 2021-22 marketing year ending September as against the earlier forecast of 305 lakh tonnes, according to industry body ISMA.
Releasing its second advance estimates, Indian Sugar Mills Association (ISMA) said, "The country is expected to produce 314.50 lakh tonnes of sugar during 2021-22 season." Sugar marketing year runs from October to September. Sugar output stood at 311.8 lakh tonnes in the 2020-21 season.
"This is after considering an estimated diversion of sugar equivalent of 34 lakh tonnes for production of ethanol by means of diversion of sugarcane juice /syrup or B-heavy molasses," the association said in a statement on Monday.
Sugar production in Uttar Pradesh is seen at 102 lakh tonnes in 2021-22 as against 110.59 lakh tonnes in the previous year due to lower cane yields and lower sugar recoveries along with much higher diversion of sugar for production of ethanol by way of diversion of B-heavy molasses and sugarcane juice.
It is estimated that about 12.55 lakh tonnes of sugar will be diverted for ethanol production by the sugar mills in UP in the current year as compared to about 6.90 lakh tonnes diverted in 2020-21.
Maharashtra is expected to produce about 117 lakh tonnes in 2021-22 as against 106.50 lakh tonnes produced in 2020-21.
Higher estimated sugar production this year is mainly due to increased cane area by about 11% and better cane yields and sugar recovery as compared to the last season.
"This is owing to favourable weather conditions as well as increase in percentage of ratoon cane, which helps in better recovery," ISMA said.
Based on the allocations made by the OMCs for supply of ethanol in 2021-22 so far and expected to be allocated in the current season, it is estimated that sugar mills in Maharashtra will divert about 11.27 lakh tonnes of sugar equivalent for production of ethanol in the current year, which is much higher as compared to about 7.12 lakh tonnes diverted in 2020-21.
Karnataka is expected to produce about 45.21 lakh tonnes of sugar in 2021-22 as against 44.68 lakh tonnes produced in 2020-21. Mills in the State are expected to divert about 7.37 lakh tonnes of sugar equivalent for ethanol production in the current year as compared to about 5.02 lakh tonne diverted in 2020-21.
On demand, ISMA said sugar mills have sold 69.06 lakh tonnes during October-December of this marketing year, up around 1.5 lakh tonnes from the year-ago period.
With the demand for sugar picking up, the association estimated that the domestic consumption of sugar would be around 270 lakh tonnes in 2021-22.
Sugar exports during October-December quarter rose to 16.23 lakh tonnes as against 4.49 lakh tonnes in the corresponding period of the previous year.
With another 8 lakh tonnes of physical exports in January 2022, the total exports are estimated to cross over 24 lakh tonnes by the end of January 2022.
"Export contracts for around 40 lakh tonnes have already been entered into, and therefore the market is very positive that India will be able to export 60 lakh tonnes in the current season quite comfortably by the end of September 2022," the statement said.
Considering an opening stock of about 82 lakh tonnes on October 1, 2021, and domestic consumption of 270 lakh tonnes, sugar exports of 60 lakh tonnes and the estimated production of 314.5 lakh tonnes, ISMA said the closing stocks as of September 30, 2022, are expected to be around 66.50 lakh tonnes.