New Delhi, Feb 2025 – India’s sugar production has declined by 16.9%, reaching 26.52 million tonnes this season, compared to 31.9 million tonnes in the previous season, according to estimates from the All India Sugar Trade Association (AISTA).
Key Reasons for Sugar Production Decline
Experts attribute this significant drop to multiple factors:
✅ Red rot disease affecting sugarcane crops in western Uttar Pradesh
✅ Floods in the eastern region, damaging large portions of the harvest
✅ Low sugar recovery rates due to lower polarisation (POL) in sugarcane
✅ Increased diversion of sugarcane for ethanol production (estimated at 4 million tonnes)
Impact on Sugar Industry & Market
The National Federation of Cooperative Sugar Factories (NFCSF) reports that between October 1, 2024, and January 15, 2025:
- Sugarcane crushing fell by 8%, dropping to 148.21 million tonnes from 161.28 million tonnes last year.
- Total sugar production declined by 13.65%, with 13.06 million tonnes produced compared to 15.12 million tonnes in the previous season.
- 507 sugar mills are operational this season, slightly lower than 524 mills last year.
Sugar Supply & Market Forecast
- Estimated sugar consumption: 29 million tonnes
- Estimated exports: 1 million tonnes
- Carryover stock from 2023-24 season: 7.98 million tonnes
- Total domestic availability (excluding exports): 33.5 million tonnes
- Projected closing stock (by Sept 30, 2025): 4.5 million tonnes
Ethanol Price Hike Raises Concerns
Shankar Thakkar, National Secretary of Confederation of All India Traders (CAIT), expressed concerns over the government’s decision to increase ethanol prices. He warned that:
🔹 Higher ethanol prices will lead to increased diversion of sugarcane towards ethanol production.
🔹 With lower sugar production, prices may rise, affecting consumers and food businesses.
🔹 If ethanol becomes more expensive than crude oil, blending it with petroleum may become economically unviable.
Thakkar urged the government to reconsider the ethanol price hike to balance sugar availability, ethanol production, and overall economic sustainability.
Conclusion
With India’s top sugar-producing states—Uttar Pradesh, Maharashtra, and Karnataka—facing lower yields, the sugar industry is set for a challenging year. Food businesses and consumers must stay informed about potential price fluctuations in the coming months.
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