Sugar demand-supply would be comfortable in next season, says Centre

Though the situation is tight, senior government officials feel that India will have sufficient sugar stock to meet its domestic consumption requirements during the upcoming 2023-24 season if exports are curtailed.

The assessment is based on meetings with state sugarcane commissioners and feedback from the industry. It shows that consumption is projected to be around 28 million tonnes while production is expected to be at least 2-3 million tonnes more than this during the season, which starts from October.

“Though there are some concerns over the condition of the standing sugarcane crop in Maharashtra and Karnataka, the revival of rains in the last few days should help in salvaging the situation,” a senior government official said.

He said for the remaining part of the 2022-23 sugar season, mills have stocks of around 8.3 million tonnes up to August 31.This is sufficient  to last the coming three months before sugarcane crushing for the new season starts.

The monthly sugar consumption in India is around 2-2.5 million tonnes, depending on demand.

The Centre, the official said, is contemplating imposing a stock holding limit for the first time since 2016. This will help prevent hoarding and price manipulation. The limit could be for both retailers and wholesalers and may ensure that sugar concealed in the system comes out.

Sugar has a combined weight of 1.13 per cent in the consumer price index (CPI). This is lower than rice, wheat and refined edible oils.

“Also, we must acknowledge that since the last 10 years, sugar prices haven’t moved much beyond Rs 40 a kg at the retail level. This comes even though there has been a sharp corresponding increase in the sugarcane fair remunerative price (FRP) during the same period,” the official added. He said the government needs to balance the interests of consumers, sugar millers and sugarcane farmers simultaneously.

Meanwhile, market sources said some state governments have for the first time postponed their decisions to increase the state advised price (SAP) of sugarcane for the 2023-24 season.

On Tuesday, a Reuters report had said that sugar prices in India have jumped by more than 3 per cent in a fortnight to their highest level in six years. This is because key growing regions have raised production concerns for the upcoming season.

The report added that although Indian sugar prices rose to Rs 37,760 ($454.80) per tonne on Tuesday — their highest since October 2017 — they are still 38 per cent lower than the global white sugar benchmark.

Call to disclose masur stocks 

The Centre on Wednesday issued an order directing all stakeholders to mandatorily disclose their stocks of masur (lentil). It said any stock which remains undisclosed will be considered as hoarding. The move is to cool down masur prices, which have also moved up due to supply shortage. According to the department of consumer affairs, masoor prices in Delhi markets have firmed up by Rs 4 per kg during the last one month.