Carry-forward stock likely to keep sugar price stable, says ISMA DG
Pune: Director general of Indian Sugar and Bio-energy Manufacturers Association (ISMA) Deepak Ballani said the sugar price might remain stable despite a decline in production because of surplus carry-forward stocks .The sugar millers' association anticipates the sugar production to drop to 264 lakh tonnes in the 2024-25 cycle (Oct to Sept). India's sugar output during the previous cycle was 299 lakh tonnes. Factoring in the diversion of sugar towards ethanol production, the decline in sugar production would be around 20 lakh tonnes, Ballani told TOI.The lower sugar production could be attributed to damage to crops because of unseasonal rainfall in Maharashtra and red rot in Uttar Pradesh, he said. India was well placed with carry-forward stocks despite a drop in production, he said. This would support domestic consumption until the new production hits the market."Sugar production was enough to meet domestic consumption and exports in addition to ethanol production. This year, the govt has allowed 10 lakh tonnes of exports, of which Maharashtra's share is around 3.5 lakh tonnes," Ballani said.India had 80-90 lakh tonnes of export quota for 2023-24. By September-end, stocks are expected to be 80 lakh tonnes. This led to higher carry-forward stocks to cater to domestic consumption for two months to address the gap between the new sugar coming in. Typically, 45-50 lakh tonnes were enough to meet consumers' demand for two months, Ballani said.ISMA expects the sugarcane production to pick up in the 2025-26 season in Maharashtra and Karnataka.Ballani said ISMA was lobbying with the govt to establish a linkage between Fair and Remunerative Price (FRP), and sugar and ethanol prices to make the sugar price more competitive."Every time the FRP is increased, there should be a corresponding revision in sugar and ethanol prices. The minimum selling price for sugar is Rs31 per kg. It has not been revised since 2019. The ex-mill price decreases to Rs30-33 in Maharashtra and Rs36 in Uttar Pradesh because of surplus stock at the start of the season. It is much below the production cost. The average cost of production is Rs41 per kg," Ballani said.
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