The estimated closing sugar stock of 4.87 million tonnes this year is sufficient to cover the demand for the first two months of the upcoming season

The National Federation of Cooperative Sugar Factories (NFCSF) announced that the estimated sugar closing stock on September 30 this year is expected to be around 4.87 million tonnes (mt), which is sufficient to meet the domestic demand for the first two months of the upcoming 2025-26 season. The sugar production for the 2025-26 season (October-September) is projected at 35 mt, driven by favorable monsoon conditions and increased cane cultivation in major producing states like Maharashtra and Karnataka.

NFCSF noted that there may be a small margin of error of about 2 per cent in the closing stock estimates, as calculations are based on government release orders and data provided by sugar mills. Currently, ex-mill sugar prices remain stable between Rs 3,880 and Rs 3,920 per quintal, supported by government interventions such as limited export permissions and regulated domestic release quotas, which balance supply despite lower production and strong demand.

As of April 30, sugar production in the ongoing 2024-25 season stood at 28.69 mt, with 3 mt diverted for ethanol production. The government’s recent increase in the fair and remunerative price (FRP) of sugarcane to Rs 355 per quintal for the next season is expected to encourage farmers to cultivate more sugarcane.

The federation emphasized the need for the government to revise ethanol procurement prices to reflect rising feedstock costs and extend blending targets beyond the current 20 per cent, with a clear roadmap up to 2035. They also called for promoting Flex-Fuel Vehicles (FFVs) and exploring ethanol blending with diesel to boost demand.

The NFCSF highlighted a decline in the sugar sector’s contribution to ethanol production, which dropped from 73 per cent in 2022-23 to an estimated 38 per cent in 2023-24 and is projected to fall further to 28 per cent in 2024-25. This decrease is mainly due to ethanol prices not keeping pace with sugarcane price hikes, making ethanol production less profitable for sugar mills, resulting in under-utilization of the sector’s ethanol production capacity of 952 crore litres.