TALKING STOCK

Will sugar turn sweeter in the coming year?

- SANJEEB MUKHERJEE

After months of uncertainty, the sugar sector is once again looking up. Thanks to a revision in the production estimates in the current season and a positive outlook for the forthcoming one that will start in October, the sugar supply situation looks comfortable.

Trade and market sources say Sugar Year (SY) 2023-24 will end this month with closing stocks of 8-9 million tonnes, which would be significantly higher than the 2022-23 season's closing stocks of 5.7 million tonnes.

As a result, the country will start the 2024-25 sugar season with nearly 58 per cent more stocks than last year, assuming the closing stock at 9.1 million tonnes as estimated by the Indian Sugar and Bio-energy Manufacturers Association (ISMA). The stocks will be 42 per cent more than last year if the closing number estimated by the National Federation of Cooperative Sugar Factories is taken into consideration.

In either scenario, the 2023-24 sugar season will end up with a comfortable stock position.

Continuing comfort The country usually prefers to start a sugar season with two months of normative stocks in hand, which is estimated to be about 5.5 million tonnes. In the forthcoming sugar season (2024-25), which will start from October 1 this year, ISMA estimates gross production to be around 33.3 million tonnes. Cooperative sugar factories estimate it to be 34 million tonnes.

The expectation is that with huge opening stocks of more than 8-9 million tonnes, the total availability of sugar in 2024-25 will be about 42.35 million tonnes, once again leaving a closing stock of 7.85 million tonnes by the end of the 2024-25 season. This, too, will be more than the two-month normative requirement of 5.5 million tonnes.

In short, the sugar supply situation that has turned positive in the last few months will continue to remain comfortable next season as well.

However, just a few months ago things looked very different.