The government on Friday said sugar production in the next season starting October 1 is unlikely to drop from the current season’s level. The availability in the domestic market will be higher due to the continuation of the ban on exports, which will keep prices under check during the festival season.

However, to address the expected higher availability of sugarcane next year which may increase diversion towards ethanol, an inter-ministerial group will likely to recommend revised ethanol prices for next season in a month.

The assertion from the Government comes two days after Ithe Indian Sugar Mills Association (ISMA), an association of private mills, released its preliminary estimates of production for the 2023-24 season stating the output (after diversion towards ethanol) may drop to 31.68 million tonnes (mt) from the estimated 32.8 mt in the ongoing season to September.

“We expect sugar production (after diversion towards ethanol) to be around 32.5 mt, which is almost at par with ongoing season ending September 30,” a senior Food Ministry official said. He said since export may not be allowed until at least March 31, 2024, against 6.2 mt permitted during the current season, the domestic availability is expected to be higher.

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“In fact, we assume 5-5.5 mt may be diverted towards ethanol against about 4 mt this season,” the official said. ISMA has estimated 4.5 mt of sugar is likely to be diverted for ethanol production next season against 4.1 mt in the current season. Actually, sugar is not diverted to produce ethanol, which is made out of molasses or sugarcane juice/syrup or grains. The estimate is based on how much quantity of sugar could have been produced from the same quantity of sugarcane that gets diverted towards ethanol.

‘Prices will remain stable’

Speaking to the media, Food Secretary Sanjeev Chopra said: “This, we thought is creating some sort of panic that there is a shortage of sugar in the country. We thought we must clarify. It is highly premature to assess what will be sugar production in the next harvest beginning October.”

He highlighted that the sugarcane acreage has actually gone up to 56 lakh hectares (lh) this year from 53 lh a year ago. But, he acknowledged that there have been some concerns about patchy rainfall initially.

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Chopra said prices of sugar and other essential commodities such as edible oils and wheat will remain stable during the upcoming festival season. He said the country has 108 lakh tonnes (lt) of sugar now, while 46-48 lt would be required to meet the demand during August and September and the crushing season will start in October. The annual sugar consumption is estimated at 275 lt.

On edible oil, he said prices will be stable as the industry has imported a huge volume in the last three months when prices were relatively lower. As high as 17.5 lt of crude edible oil was imported in July, he said.