Closing sugar inventory likely to be second lowest in 10 years this year

This should augur well for millers and help clear cane dues, and also ensure a steady price of the commodity in the open market

Closing stocks of sugar in the country could hit their second lowest level in 10 years at the end of the 2021-22 sugar season that started in October.

This should augur well for millers and help in clearing sugarcane dues accruing to farmers quickly. At the same time, it may also ensure a steady price of the sweetener in the open market because of reduction in stock overhang.

According to the Indian Sugar Mills Association's (ISMA)’s latest report, sugar stocks are expected to be around 6.65 million tonnes at the end of the 2021-22 season.

This is 1.5 million tonnes lower than the 2020-21 closing stocks, and comes is after accounting for six million tonnes of exports, 31.45 million tonnes of production and almost 27 million tonnes of domestic consumption.

“Considering an opening stock of about 8.2 million tonnnes as on October 1, 2021, domestic consumption of 27 million tonnes and sugar exports of six million tonnes and the estimated production of 31.45 million tonnes, the closing stocks of sugar as on September 30, 2022 is expected to be over 1.5 million tonnes lower at around 6.65 million tonnes,” ISMA said in the report.

In the 2020-21 sugar season, the closing stock of sugar was 8.2 million tonnes.

The last time sugar closing stocks were lower than expected levels was in 2016-17 when they were around 3.4 million tonnes.

The stocks had dipped due to low production due to drought in Maharashtra.

A few weeks back, ISMA had said in another press statement, that as per their market reports in the 2021-22 season, about 1.7 million tonnes of sugar had been exported in the October-December period, while during the same period last year just around 0.45 million tonnes had been exported.

It added that amid news of a likely better upcoming season 2022-23 (April – March) in Brazil, the global price of raw sugar has fallen further and is currently reeling at an over 5-month low at around 18 cents/pound.

Indian mills were waiting for the opportune time and are in no hurry to enter into further export contracts beyond 3.8-4.0 million tonnes of which have already been signed so far, ISMA said.

Meanwhile, another industry body, the All India Sugar Trade Association (AISTA) said in a statement on January 27 that closing stocks of sugar in 2021-22 is expected to be around 7.2 million tonnes, assuming a production of 32 million tonnes and consumption of 27 million tonnes.

It said sugar consumption in the 2021-22 season is expected to rise by 2 per cent from 26.5 million tonnes.

Sugar End of season closing stock (mn tonnes)

Year	Closing Stock	Year	Closing Stock
2010-11	6.00	2016-17	3.87
2011-12	6.60	2017-18	10.72
2012-13	9.29	2018-19	14.58
2013-14	7.47	2019-20	10.74
2014-15	9.08	2020-21	8.18
2015-16	7.75	2021-22*

6.50-7.00

*Expected; The sugar season runs from October to September; SourceL ISMA and other trade bodies