The Centre has allocated 2.4 million tonnes (mt) of sugar for sales in the domestic market during May, which is unchanged from the April quota, potentially to keep prices under control.

In a notification issued by the Directorate of Sugar on April 26, the allocated quota has been distributed among 485 sugar mills across the country.

Allocation (of four mills) in Chhattisgarh has seen a 95 per cent jump from the quantity allotted for April, though it is 58 per cent lower from the allocation made in May 2022, according to All India Sugar Trade Association (AISTA).

Mills in Uttar Pradesh received 8,57,824 tonnes of quota, those in Maharashtra got 7,38,437 tonnes, and factories in Karnataka are permitted to sell 3,68,908 tonnes in domestic market in May.

Also read: India physically ships out 37.75 lakh tonnes of sugar

Estimate cut

The Indian Sugar Mills Association (ISMA) has cut its estimate of sugar production for the current season (October 2022 to September 2023), to 32.8 mt from 34 mt after considering a drop in Maharashtra output and a marginal likely increase in Uttar Pradesh and Karnataka. The annual domestic consumption is pegged at 27.5 mt. The country produced 35.76 mt in the 2021-22 season.

There has been about a 1.5 mt drop in Maharashtra from the previous estimates while UP could see 0.3-0.4 mt higher than what was pegged earlier.

Sugar production in the country dipped 5.4 per cent to 31.1 mt as of April 15 in the 2022-23 sugar season (October-September) against 32.87 mt in the year-ago period, according to ISMA.

Sugar diversion

Crushing season in Maharashtra ended with around 10.5 mt production (excluding sugar diverted for ethanol) due to unexpectedly lower cane yields owing to higher ratoon crop share and uneven distribution of rainfall, ISMA said. Though the main season in Karnataka is on the verge of closure and has already seen 5.5 mt output, the special season will operate from June-July and and there could be 5.7 mt in the entire season.

As cane yield in Uttar Pradesh is slightly better than expected, the State is likely to produce around 10.5 mt of sugar after diversion towards ethanol, ISMA said. Estimated sugar diversion towards ethanol has also been cut to 4 mt from January estimate of 4.5 mt.