India’s Sugar Production for MY 2022/23 Set to Fall by 8.4% YoY Due to Low Crushing in Major Producing States

On the 27th of April, the Indian Sugar Mills Association (ISMA) lowered its Indian sugar production forecast for MY 2022/23 (October - September) to 32.8 million mt. This recent estimate is 7.2 million mt less than the January projection, which factored in a diversion of 4.5 million mt toward ethanol production. As a result, Indian sugar production is expected to fall by 8.4% YoY from 35.8 million mt in MY 2021/22, the first major decline in close to a decade, largely due to low crushing in Maharashtra, a leading sugar production state in India.

Source: Tridge, ISMA

Projections of sugar production in the states of Uttar Pradesh and Karnataka have been revised up to 10.5 million mt and 5.6 million mt from ISMA's January forecast of 10.1 million mt and 5.6 million mt, respectively. However, these gains were not enough to overturn the decline from 12.1 million mt in sugar production in Maharashtra state for MY 2022/23 down to 10.5 million mt. Sugar production in Maharashtra, the second largest producer in India following Uttar Pradesh, was marred by lower-than-expected sugarcane yields owing to higher ratoon crop share and uneven rainfall distribution.

According to ISMA, between October 2022 and the 15th of April 2023, Indian sugar production was down 6% to 31.1 million mt, compared to 32.9 million mt in the previous marketing year. Production rose by 2.3% YoY to 9.4 million mt in Uttar Pradesh, while in Maharashtra and Karnataka, sugar production fell by 17% and 4.7% to 10.5 million mt and 5.53 million mt, respectively.

A total of 532 sugar mills have been involved in sugarcane crushing this season, up from 518 during MY 2022/23. However, the decline in sugar production has led to sugar mills concluding their crushing operations considerably earlier than expected. For example, based on data from ISMA, 400 sugar mills in India finished their operations in April, two months earlier than in 2022. This means that crushing activities continue in only 132 sugar mills in the country, significantly lower than the 305 mills that were still crushing sugarcane at this stage last year.

Despite the drop in sugar production, it is expected that sugar supplies in the country will be adequate to meet local consumption, currently pegged at 27.5 million mt, according to ISMA. However, this is still dependent on the final sugarcane crushing figures from Uttar Pradesh and Karnataka, where crushing is ongoing, following the conclusion of crushing activities in Maharashtra. As a result, the Indian government placed an export cap of 6.1 million mt to ensure that production remains adequate to meet domestic consumption (Read more here). However, due to the recent low sugar production estimate, the Indian government has decided to halt exports completely, a move that could secure local supply.