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Sugar production in India is expected to face a significant decline in the 2025 season, with forecasts predicting a drop to below 27 million metric tons (MMT), down from 31.8 MMT in the previous year, according to a Centrum report.
This marks a notable 12 per cent decrease in output, primarily attributed to increased diversion of sugarcane for ethanol production and a reduction in cane availability across key producing states. Additionally, the recent revision in ethanol prices has not lived up to expectations. While the Government of India increased prices for the Chandigarh route by 3 per cent, the anticipated hikes for the Bihar and Direct routes were not implemented, leading to some disappointment within the sector. Despite these setbacks, sugar prices remain strong, with prices in Uttar Pradesh exceeding Rs 40,000 per ton and similar increases in Maharashtra, where prices are hovering around Rs 37,000 per ton. This price strength is expected to provide a notable boost to the sector's earnings before interest, taxes, depreciation, and amortization (EBITDA) in the fourth quarter of FY25 and into FY26. As of January 31, 2025, sugar production in India has seen a notable decline, with the total production falling to 16.5 million metric tons (MMT) from 18.8 MMT during the same period last season. This 12 per cent reduction in sugar production is attributed primarily to a combination of lower cane availability, especially in Maharashtra (MH), and an increasing diversion of sugarcane towards ethanol production. State-wise data reveals that sugarcane crushing across the country has decreased by 3.9 per cent year-on-year, with a total of 186 MMT crushed as of the end of January, compared to 193 MMT during the same period last season. Notably, Maharashtra has witnessed a significant drop of nearly 15 per cent in cane availability year-on-year, contributing to the overall reduction in sugar output. Additionally, the cane diversion to ethanol has further impacted sugar production figures. However, in a positive turn, the cane availability has improved over the past fortnight, driven by strong recovery in Maharashtra. Karnataka has also shown resilience, recording a 29 per cent year-on-year increase in cane availability in the recent fortnight, a sign of the state's strong momentum. Overall, Karnataka has managed to recover significantly, with a modest 3.2 per cent growth in cane availability for the season, reversing earlier declines. In contrast, Uttar Pradesh has remained largely stable, seeing only a marginal two per cent decline in cane availability for the fortnight, resulting in a steady performance for the season, with a slight one per cent growth year-on-year. Maharashtra, on the other hand, has experienced a drastic 48 per cent rise in cane availability for the fortnight, although its overall cane availability for the season is still down by 8.8 per cent. (ANI)
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