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Informist, Wednesday, Sept. 10, 2025

 

By Pallavi Singhal

 

NEW DELHI – With demand for sugar considerably down this year, the Centre is likely to set combined sugar sales quota for October and November at 4.5 million tonnes, significantly down from the 4.75 million tonnes it gave out last year, a senior government official told Informist. Of the total 4.5 million tonnes likely to be allotted, nearly 2.3 million tonnes will be allotted for October and about 2.2 million tonnes for November, the official said.

 

"Sugar sales from mills have been significantly down this year. Generally sales rise in Jun-Jul and then again during the festive season. With Diwali falling earlier this year, we were expecting sales to begin rising towards August-end onwards, but so far, the trend has not been witnessed," the official said. 

 

The government's sugar sales quota for July was 2.2 million tonnes, down 8.3% on year and the quota for June was 2.3 million tonnes, down almost 10% on year. The quota was set at 2.25 million tonnes in August, up 2% on year on festival demand. The quota was set at 2.35 million tonnes for September, unchanged from a year ago despite an early Diwali this year, on low demand.

 

"We do not see much of a change in consumption trend as the sales did not see a spurt even during festivals like Durga Puja whose sales should have already been clocked in a month ahead of the festival, or during Ganesh Chaturthi. Any change to these allocations is only likely if there is a bump seen in sugar sales from mid-September onwards owing to Diwali demand," the official said.

 

While sugar sales in the summer months had fallen due to the early arrival of monsoon. Fewer days of heatwaves led to a slump in sugar demand from soft drink makers and ice cream manufacturers, the sales in the festive season are seen falling on account of positive sentiment on better cane crop prospects, according to market participants. 

 

"Prices had seen a significant rise, jumping from about INR 3,500 per 100 kg to INR 3,900 per 100 kg when the government allowed a sugar export quota in January. Prices have since been stable and prospects of a good cane crop are now affecting demand by stockers. No one is worried about building up the pipeline on high crop prospects," MEIR Commodities Chairman G.K. Sood, said. The area under sugarcane has risen 3% on year to 5.7 million hectares. With heavy rains in key states of Maharashtra, Uttar Pradesh, and Karnataka, the yields and production are also seen up, raising gross sugar production forecasts. 

 

The government had in 2023-24 (Oct-Sept) allowed about 29.15 million tonnes of sugar sales from mills, but only gave quotas for 27.55 million tonnes this year. Last year's unusually high demand was partly driven by general elections and reports of sugar leakages to neighbouring countries like Bangladesh. Though exports were technically banned, these unofficial exports were leaking from domestic sales, inflating the domestic sales quota. According to trade consensus, some 700,000-1 million tonnes sugar was smuggled to Bangladesh and Nepal in 2023-24. 

 

India's sugar consumption has grown at an average annual rate of 1.8% over the past decade, rising from 24.8 million tonnes in 2015-16 to a peak of 29.1 million tonnes last season. The dip in the current season marks a pause in that upward trend.  End

 

Edited by Akul Nishant Akhoury

 

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