Historic high production, but no dip in sugar prices

Given the present trend, Naiknavare confirmed that India would end up producing 355 LT of sugar. What has made this season stand out is the constant rally in ex-mill prices of sugar despite the bumper production. Naiknavare said the average ex-mill price is around Rs 3300/quintal for S grade and Rs 3550/quintal for M grade sugar. This is mainly due to record breaking sugar export contracts of 85 LTs out of which 65 LTs of sugar has been physically dispatched from mill to ports for exports,” he said. Also, the exports have been done without any government subsidy.

Major sugar export destinations are Indonesia (15%), Bangladesh (10%) and 3% each to Afghanistan, Somalia, Djibouti & Malaysia. The final expected 95 LTs sugar exports would generate revenue of Rs 30,000 crore.

This year’s bumper production has been mainly due to Maharashtra, Uttar Pradesh and Karnataka who have contributed around 85 per cent of the total production. These three states have produced 291 LTs of sugar as on April 30 against their 254 LTs of sugar as on  April 30, 2021. Maharashtra is expected to produce over 135 LT of sugar which would be the highest ever produced in the state. “This year’s crushing season, especially in Maharashtra, Uttar Pradesh, Haryana, and Gujarat, may continue till the end of May which would be another record ,” he said.