India’s sugar production likely to decline by 12% due to weak crop, lower recovery rates

India’s sugar production for the 2024-25 crushing season is projected to decline by 12.23% compared to the previous year, according to the National Federation of Cooperative Sugar Factories (NFCSF). The estimated production is 280 lakh tonnes, down from 319 lakh tonnes last season.

As of December 15, 2024, sugar output stood at 60.85 lakh tonnes, marking an 18% decline from the 74.20 lakh tonnes produced during the same period last year. A total of 472 sugar mills are currently operational, fewer than the 501 mills that were active at this point last season. The sugar recovery rate has also fallen, dropping to 8.46% from 8.72% last year.

Harshvardhan Patil, President of NFCSF, emphasized the need for immediate decisions on increasing the minimum selling price (MSP) of sugar and ethanol prices, which are crucial for the industry’s viability. He expressed optimism that the government would address these issues within the next two to three weeks.

The government is also expected to reassess sugar production figures in January 2025 and may announce export-related decisions based on the updated estimates.

This season approximately 40 lakh tonnes of sugar will be diverted for ethanol production this season. Oil Marketing Companies (OMCs) have issued tenders for 88 crore litres of ethanol for Q4 of the Ethanol Supply Year 2024-25, with sugar mills offering to supply 26 crore litres by diverting 3 lakh tonnes of sugar.