Sugar output may dip 11%, says govt, rules out ethanol diversion impact on prices
The Indian government has lowered its sugar production estimate for the current season to 306 lakh tonnes due to weather and crop disease, while dismissing claims that ethanol diversion is driving up retail prices. Despite the supply concerns, officials maintain that existing stocks are sufficient to meet demand.
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The report highlights the intersection of agricultural policy, food security, and energy mandates in a major emerging economy.
NEW DELHI: Sugar production during the current season (Oct-Sept) is estimated around 306 lakh tonnes, 11% lower than the initial projection of 343 lakh tonnes for the year by sugarcane-growing states, govt said Friday. It also dismissed allegations of diversion of sugar for ethanol production hitting availability of the sweetener and spike in prices, stating that smaller amount of sugar goes for ethanol production than was the case a few years ago.The lower output is expected to reduce the opening stock of sugar on Oct 1 to around 33-34 lakh tonnes, down from 50 lakh tonnes a year earlier - around two-thirds of last year's level. Officials, however, said the carry-over stock would be sufficient to meet demand until fresh sugar from the new crushing season starts reaching the market.
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