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Informist, Tuesday, Mar. 25, 2025

By Taniva Singha Roy

MUMBAI – The Centre is likely to set the sugar sales quota for April somewhere around 2.35 million tonnes to 2.40 million tonnes, up from 2.30 million tonnes in March, market participants told Informist. With strong demand anticipated in April, particularly from large-scale consumers such as ice cream and soft drink manufacturers as the summer season intensifies, the quota is expected to be higher than in the previous months, they said.

The government may announce the April sales quota in the next one or two days. 

In March, the government set a sales quota of 2.3 million tonnes, which was 2.2% higher than the previous month but 2.1% lower than the 2.35 million tonnes set in March last year. The sales quota last month was initially seen insufficient as there were festivals like Holi and the usual summer season demand, which drove prices up. However, contrary to the market expectation, the quota was sufficient to meet the demand.

However, this time the quota is unlikely to exceed 2.4 million tonnes, as the government doesn't have sufficient stock, according to Semal Sudhir Jain, secretary of Kolhapur, Karad, and Sangli Sugar Merchant Association. With higher demand expected this season, prices are likely to rise, hovering between INR 3,800 and INR 3,850 per 100 kg, up from the current level of INR 3,700 per 100 kg, Jain added.

The sales quota is likely to be around 2.4 million tonnes and not any lesser, said Mukesh Kuvadia, secretary of Bombay Sugar Merchants Association. "It is going to be difficult to cope with demand, hence the quota is very unlikely to be below that," Kuvadia said. If the quota is as expected, prices are likely to remain steady, but if it is anything beyond that, prices might fall by INR 20-INR 30 per 100 kg, he said. 

Some market participants believe that the quota for April is going to be nearly 2.25 million tonnes to 2.3 million tonnes. Due to a lower production outlook, the sales quota will also be meagre, Naresh Gupta, a trader from north India, said. In that case, sweetener prices could be in the range of INR 4,000-INR 4,100 per 100 kg in the coming month, Gupta said.

The government fixes the maximum quantity of sugar available for sale every month to support prices and help mills clear the arrears of sugarcane farmers. The government sets monthly sales quotas for each sugar mill.

Sugar production in 2024-25 (Oct-Sep) is estimated to decline 17% on year to 26.5 million tonnes from 31.9 million tonnes last year, according to the All India Sugar Trade Association. Sugar output is projected to fall due to a decline in sugarcane yields in major producers--Uttar Pradesh, Maharashtra, and Karnataka--in the wake of erratic climatic factors.  End

Edited by Subhojit Sarkar

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