Sugar producers demand export resumption as output is likely to exceed demand

The Indian Sugar and Bio-Energy Manufacturers Association (ISMA) said production has reached 314 lakh tonnes in the first seven months of the 2023-2024 sugar season. With additional output of almost six lakh tonnes expected from the sugar mills in Karnataka and Tamil Nadu, the net sugar production is estimated to be close to 320 lakh tonnes.

A press release from the ISMA said 516 factories have stopped crushing operations and only 16 were continuing operations. Some factories in Karnataka and Tamil Nadu will operate during the special season (June – September) that occurs only in these two states.

India, the world’s second-largest sugar producer after Brazil, has banned sugar exports since June 2022 to guarantee to cover local consumption, as well as diverting sucrose to ethanol production.

“It is still early days,” Sanjeev Chopra, India’s Secretary of Food and Public Distribution, told reporters on the sidelines of the Citi ISO Datagro Sugar Conference in New York.

He said sugar exports were unlikely to resume before the government had guarantees that there would be enough sugar to satisfy local demand plus stocks for at least two and a half months, and sufficient sucrose to divert to the ethanol program.

Chopra said the government saw ethanol production as a clear priority over resuming sugar exports.

India’s sugar industry body ISMA recently asked the government to allow exports of 2 million metric tons. It is yet to receive an answer, said ISMA Director General Deepak Ballani, who was also at the conference.

Ballani said India would have 9 million tons of sugar in hand at the end of the current season in September, after a diversion to ethanol production – enough for local consumption and exports. “The exports would give millers better liquidity,” he said.