Sugar production target cut again, but price pressure unlikely

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The Indian Sugar Mills Association (ISMA) has once again cut the production estimate for the sugar year 2022-23. In the new estimate, ISMA has estimated 328 lakh tonnes of sugar production this year. Earlier, the estimate released in January showed 340 lakh tonnes. When the first estimate came out in October last year, it was pegged at 365 lakh tonnes.

ISMA statistics show that during the sugar year 2021-22, a total of 358 lakh tonnes of sugar was produced in the country. Till April 15 this year, 311 lakh tonnes of sugar have been produced in the country, while last year till April 15, more than 328 lakh tonnes of sugar was produced. Therefore, there is an estimated reduction of 5.4 percent in the country’s total sugar production. However, this time the production of sugar in Uttar Pradesh, the second-largest producer of sugar, has registered an increase of three lakh tonnes.

What will be the effect?

A total production of 328 lakh tonnes is estimated in the country this year while there is an old stock of 55 lakh tonnes.

This way, the total stock will be 383 lakh tonnes. Out of this, 60 lakh tonnes have been exported. So, the sugar availbility in the country will be 323 lakh tonnes. The annual domestic consumption of sugar is 275 lakh tonnes. Even after consumption, there will be an additional stock of 48 lakh tonnes of sugar. It is believed that the government will reserve additional stock to keep the supply chain strong. Because of this, there is no possibility of pressure on the supply chain in the domestic market. According to the data of the Central Consumer Affairs Department, the wholesale price of sugar in Delhi is Rs 3,800 per quintal.

In the retail market the price is Rs 41 per kilo. As of now, there is no possibility of major fluctuations in this price.