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Higher world maize and sugar prices offset by lower vegetable oil quotations

The overall measure of international food commodity prices was broadly stable in September, with declines in quotations for vegetable oils, dairy and meat offset by a notable increase in those for sugar and maize, the Food and Agriculture Organisation of the United Nations (FAO) reported.

The FAO Food Price Index, which tracks monthly changes in the international prices of globally-traded food commodities, averaged 121.5 points in September, compared to 121.4 points in August. At this level, the index is 10.7 per cent below its value a year ago and 24.0 per cent below its all-time high reached in March 2022.

The FAO Cereal Price Index rose 1.0 per cent from the previous month, due to a 7.0 per cent increase in international maize prices, driven by strong demand for Brazil’s supplies, slower farmer selling in Argentina and increased barge freight rates due to low water levels on the Mississippi River in the United States of America. International wheat prices fell by 1.6 per cent, underpinned by ample supplies and good production prospects in the Russian Federation, while the FAO All-Rice Price Index dipped by 0.5 per cent amid generally low import demand.

The FAO Vegetable Oil Price Index declined by 3.9 per cent from August, with international quotations for palm, sunflower, soy and rapeseed oils all down, driven in part by elevated seasonal production and abundant global export supplies.

The FAO Sugar Price Index increased by 9.8 per cent from August, reaching its highest level since November 2010 amid increasing concerns over a tighter global supply outlook in the upcoming season. Early forecasts point to production declines in Thailand and India, both key producers, associated with the prevailing El Niño event. The large crop currently being harvested in Brazil, amidst favourable weather conditions, limited the month-on-month increase in world sugar prices.

The FAO Dairy Price Index declined by 2.3 per cent from August, its ninth drop in a row, impacted by lacklustre global import demand and ample stocks in leading producing regions. The euro’s relative weakness against the United States dollar also weighed on international dairy prices.

The FAO Meat Price Index dipped by 1.0 per cent from the previous month, with a mixture of weak import demand and ample global export availabilities pushing down quotations for pig, poultry, and ovine meats. By contrast, international bovine meat prices rebounded on the back of a strong import demand for lean beef, especially in the United States of America.

Higher world maize and sugar prices offset

This fully digital initiative will facilitate smooth sugar market with deterrence to commodity hoarders from any speculative transactions.

Government of India has been successfully maintaining stable retail price of sugar in the country. As a proactive measure to combat hoarding and curb unscrupulous speculation in the sugar market Government has issued orders to mandatory disclose stock position of sugar for Traders/Wholesaler, Retailer, Big Chain Retailer, Processors of Sugar on the portal (https://esugar.nic.in) of Department of Food and PD on every Monday.

This mandatory weekly stock disclosure for these entities is another proactive step in Government of India’s efforts to maintain a balanced and fair sugar market. By preventing hoarding and speculation, Government of India is aiming to ensure that sugar remains affordable for all consumers. This proactive measure empowers regulatory authorities to closely monitor stock levels and take prompt action against any potential market manipulation.

This fully digital initiative will facilitate smooth sugar market with deterrence to commodity hoarders from any speculative transactions. Besides, it will also provide real-time data on sugar stocks and help the Government to make further policy decisions, as and when need arises, to mitigate the impact of rumours of rising sugar prices on consumers and the industry.

Further, Government is also expecting cooperation from sugar mills and traders to adhere to the relevant laws and monthly domestic quota norms. Strict action will be taken against the mills violating the same.

With 83 LMT at the end of August 2023 and expected beginning of crushing in Oct 2023, India has sufficient stocks for domestic consumption with absolutely no shortage for festivals. In fact, Government has released first tranche of domestic sales quota of 13 LMT also which sugar mills can start selling with immediate effect. More quota will be released in due course in view of market conditions.

This fully digital initiative will facilitate smooth

The additional sugar in the domestic market will ensure reasonable prices all over the country

Keeping in view the strong demand for sugar for the upcoming festivals of Onam, Raksha Bandhan, and Krishna Janmashtami, the additional quota of 2 LMT (over and above 23.5 LMT already allocated for August 2023) is being allocated for August 2023. The additional sugar in the domestic market will ensure reasonable prices all over the country.

Despite a 25 per cent increase in international sugar prices in the last year, the average retail price of sugar in the country is about ₹ 43.30 per kg and is likely to remain in range bound only. There has been less than 2 per cent annual inflation in the country in sugar prices in the last 10 years.

During the current Sugar Season (Oct-Sep) 2022-23, India is estimated to have produced of 330 LMT sugar after the diversion of about 43 LMT for ethanol production. Domestic consumption is expected to be around 275 LMT.

At the present stage, India has sufficient sugar stock to meet its domestic demand for the remaining months of the current SS 2022-23 and the optimum closing stock of 60 LMT (sufficient to meet sugar consumption for 2 ½ months) will be available at the end of this season i.e. 30.09.2023.

The recent increase in sugar prices will cool down soon as each year during July-Sep, just before next season, prices increase and then come down on the start of cane crushing. Thus, the price rise in sugar is very nominal and for a short duration.

The additional sugar in the domestic market

Falling international maize and sugar prices partly offset notable jumps in wheat and vegetable oil quotations

Global food commodity prices rose in July, influenced by the termination of the Black Sea Grain Initiative and new trade restrictions on rice, the Food and Agriculture Organisation of the United Nations (FAO) reported

The FAO Food Price Index, which tracks monthly changes in the international prices of globally-traded food commodities, averaged 123.9 points in July, up 1.3 per cent from the previous month while 11.8 per cent below its July 2022 level.

The increase was driven by a sharp jump in the FAO Vegetable Oil Price Index, which rose 12.1 per cent from June after seven months of consecutive declines. International sunflower oil prices rebounded by more than 15 per cent in the month, due mostly to renewed uncertainties surrounding the exportable supplies after the Russian Federation’s decision to end the implementation of the Black Sea Grain Initiative. World prices for palm, soy and rapeseed oils increased on concerns over output prospects in leading producing countries.

The FAO Cereal Price Index declined by 0.5 per cent from June, driven by a 4.8 per cent drop in international coarse grain quotations due to increased seasonal supplies of maize from ongoing harvests in Argentina and Brazil and potentially higher-than-anticipated production in the United States of America. However, international wheat prices rose by 1.6 per cent, their first monthly increase in nine months, due to uncertainty over exports from Ukraine as well as continued dry conditions in North America.

The FAO All Rice Price Index increased by 2.8 per cent on the month and 19.7 per cent on the year to reach its highest nominal level since September 2011, as India’s 20 July prohibition of non-parboiled Indica exports fostered expectations of greater sales in other origins, amplifying upward pressure already exerted on prices by seasonally tighter supplies and Asian purchases. This upward pressure on rice prices “raises substantial food security concerns for a large swathe of the world population, especially those that are most poor and who dedicate a larger share of their incomes to purchase food,” FAO warned, adding that export restrictions can bear adverse consequences on production, consumption and prices that last beyond the duration of their implementation and risk exacerbating high food domestic inflation in many countries.

The FAO Sugar Price Index declined by 3.9 per cent as good progress in Brazil’s sugarcane harvest and improved rains across most growing areas in India weighed on world quotations, as did subdued demand from Indonesia and China, the world’s largest sugar importers. Persistent concerns over the potential impact of the El Niño phenomenon on sugarcane crops, along with higher international crude oil prices, mitigated the decline.

The FAO Dairy Price Index declined by 0.4 per cent in July to stand 20.6 per cent below its July 2022 value. World cheese prices recovered slightly after steep recent declines as hot weather affected seasonally declining milk supplies in Europe.

The FAO Meat Price Index declined 0.3 per cent from June. Quotations for bovine, ovine and poultry meat declined on solid supply availabilities and in some cases lower demand from leading importers. Pig meat prices, by contrast, rose, reflecting high seasonal demand coupled with ongoing tight supplies from Western Europe and the United States of America.

Falling international maize and sugar prices partly

At the end of July 2023, India has a sugar stock of about 108 LMT, which is sufficient to meet domestic demand for the remaining months of the current SS 2022-23.

The government of India has been successfully maintaining stable retail prices of sugar in the country. Though international sugar prices have touched the highest level in a decade in April-May 2023, domestic prices of sugar have nominal inflation of about 3 per cent, which is commensurate with the hike in Fair & Remunerative Price (FRP) of sugarcane.

At the end of July 2023, India has a sugar stock of about 108 LMT, which is sufficient to meet domestic demand for the remaining months of the current SS 2022-23 and also for optimum stock of about 62 LMT at the end of the season. Thus, enough sugar is available for domestic consumers at reasonable prices throughout the year.

In addition, the interests of sugarcane farmers are being addressed by ensuring Fair & Remunerative prices as well as their timely payments by sugar mills. 99.9 per cent of cane dues of sugarcane farmers for the sugar seasons up to 2021-22 have already been cleared by sugar mills. Even for the current sugar season 2022-23, with payments of more than ₹ 1.05 lakh crores, about 93 per cent of cane dues payments have already been cleared as of date.

International sugar prices are almost 50 per cent higher than those in India. The average retail price of sugar in the country is about ₹ 43 per kg and is likely to remain in range bound only. It can be seen from the chart below that there has been less than 2 per cent annual inflation in the country in sugar prices in the last 10 years. Domestic prices have been kept stable with little increase as a result of pragmatic government policy interventions.

Timely government interventions have brought the sugar sector out of the crisis. Strong fundamentals of the sugar sector and more than sufficient production of sugarcane and sugar in the country have ensured that sugar remains within easy access to each & every Indian consumer.

During the current Sugar Season (Oct-Sep) 2022-23, India is estimated to have produced of 330 LMT sugar after the diversion of about 43 LMT for ethanol production. Thus, total sucrose production in the country would be about 373 LMT which is the second highest in the last 5 years. Further, there has been a considerable increase in the production of sugar during the last 10 years; however, the consumption has not increased in the same proportion; thereby, ensuring the availability of sufficient stock for any unforeseen event.

At the end of July 2023, India

Production growth to slow in step with population, while geopolitical tensions, climate change, animal and plant diseases and price volatility pose long-term uncertainty

Global agricultural and food production is projected to continue to increase over the next ten years but at a slower pace of growth than the previous decade due to demographic trends, according to a report released by the Food and Agriculture Organisation of the United Nations (FAO) and the Organisation for Economic Co-operation and Development (OECD).

The OECD-FAO Agricultural Outlook 2023-2032 is the critical global reference for medium-term prospects for agricultural commodity markets. While uncertainty has risen due to geopolitical tensions, adverse climate trends, animal and plant diseases and increased price volatility for key agrarian inputs, global production of crops, livestock products and fish are projected to grow at an average annual rate of 1.1 per cent during the period, half the pace recorded in the decade ending in 2015. Total food consumption is expected to rise by 1.3 per cent per annum to 2032, indicating an increase in the share of agricultural commodities used as food.

These projections assume a fast recovery from recent inflationary pressures, normal weather conditions, no major policy changes and on-trend evolution in consumer preferences. The possibility is that persistent inflationary pressures pose downside risks to global food demand and production.

In a special assessment of key farming input prices, which have risen significantly in the past two years, Outlook calculates that every 10 per cent increase in fertiliser prices leads to a 2 per cent increase in food costs, with the burden falling hardest on the poor, who spend a larger share of their budget on food. The Outlook highlights the importance of policies to ensure greater efficiency and resilience.

“The broad trends outlined in this report are heading in the right direction but need to be accelerated,” QU Dongyu, FAO Director-General said. “Promoting a faster shift to sustainable agrifood systems will bring many benefits and help usher in better lives for all, leaving no one behind.”


“Surges in agricultural input prices experienced over the last two years have raised concerns about global food security,” Mathias Cormann, OECD Secretary-General said. “Investments in innovation, further productivity gains and reductions in the carbon intensity of production are needed to lay the foundation for long-term food security, affordability and sustainability.”


The Outlook offers decadal projections for cereals, vegetable oils, dairy products, meat, sugar, and fish, as well as cotton, tropical fruits, pulses and agricultural output used for biofuels. It also includes projections for expected regional trends in greenhouse gas emissions from agriculture and incorporates first-time preliminary analyses of the role of food loss and waste.  

Production growth to slow in step with

As of October 31, 2022, more than 96 per cent of cane dues of farmers for SS 2021-22 have already been cleared despite record procurement of sugarcane of more than Rs 1.18 lakh crore

The government of India has allowed the export of sugar up to 60 Lakh Metric Tonne (LMT) during the sugar season (SS) 2022-23. The Director General of Food Trade (DGFT) has already been notified to extend the inclusion of sugar exports under the ‘Restricted’ category up to October 31, 2023.

The Central Government has prioritised the availability of about 275 (LMT) of sugar for domestic consumption, about 50 LMT of sugar for diversion to ethanol production and has a closing balance of about 60 LMT as of 30.09.2023. A balanced quantity of sugar produced by sugar mills in the country would be allowed for exports. Since at the beginning of sugar season 2022-23, initial estimates of sugarcane production are available, it has been decided to allow the export of 60 LMT sugar. The sugarcane production in the country will be reviewed periodically and based on the latest available estimates, the quantity of sugar exports to be allowed could be reconsidered.

During SS 2021-22, India exported 110 LMT of sugar and became the second largest exporter of sugar in the world and earned about Rs 40,000 crore worth of foreign exchange for the country. Timely payment and low carrying cost of stocks for sugar mills also resulted in early clearance of cane arrears of farmers. As of October 31, 2022, more than 96 per cent of cane dues of farmers for SS 2021-22 were already cleared despite record procurement of sugarcane of more than 1.18 lakh crore rupees.

In the sugar export policy for SS 2022-23, Government has announced a sugar mill-wise export quota for all sugar mills in the country with an objective system based on the average production of sugar mills in the last three years and the average sugar production of the country in last 3 years. Further, to expedite the sugar exports and to ensure flexibility to sugar mills in the execution of the export quota, mills may decide to surrender the quota partially or fully within 60 days of the date of issue of the order or they can swap the export quota with domestic quota within 60 days.

At the end of Sugar Season 2022-23, it is expected that most sugar mills will be able to sell their products either in the domestic market or in the international market through exports and will clear the cane dues of farmers in time. Thus, the policy has created a WIN-WIN situation for sugar mills in the country.

As of October 31, 2022, more than

The new facility will come up on 1.25 acre land at total cost of about Rs 5 Cr

Dr T R Sharma, Deputy Director General (Crop Science), ICAR lays the foundation stone of the new building of ICAR-IISR, Lucknow Biological Control Centre at Pravaranagar (Maharashtra). 

The proposed building and facilities of Biological Control Centre is constructed on about 1.25 acre land with the total cost of about Rs 5 crore, which is sanctioned by the Government of Maharashtra under RKVY scheme.

A Discussion on the ongoing research projects and experiments in the sugarcane fields and the research work and outreach activities of the centre for the benefit of sugarcane farmers of the Maharashtra also took place. 

Dr T R Sharma said that in view of the increasing demand for sugar and ethanol in the country, sugarcane farmers need to obtain high production of sugarcane by using modern technology developed and advocated by the ICAR-Indian Sugarcane Research Institute. Dr Sharma also advocated the use of bio agents for the management of pests and diseases in sugarcane.

The new facility will come up on

Govt will allow sugar exports upto 100 LMT

The government has decided to allow export of sugar upto 100 LMT with a view to maintain the domestic availability and price stability during the sugar season 2021-22 (October-September). As per the order issued by DGFT, with effect from June 1, 2022 till October 31, 2022, or till further order, whichever is earlier, the export of the sugar will be allowed with specific permission of the Directorate of Sugar, Department of Food & Public Distribution. 

The decision came in the light of record exports of the sugar. In sugar seasons 2017-18, 2018-19 & 2019-20, only about 6.2 LMT, 38 LMT & 59.60 LMT of sugar was exported. In sugar season 2020-21 against target of 60 LMT about 70 LMT have been exported. In the current sugar season 2021-22, contracts for export of about 90 LMT have been signed, about 82 LMT sugar has been dispatched from sugar mills for export and approx. 78 LMT have been exported. Export of sugar in current sugar season 2021-22 is the historically highest. 

The decision will ensure that the closing stock of sugar at the end of sugar season (September 30, 2022) remains 60-65 LMT which is two to three months stocks (monthly requirement is around 24 LMT in those months) required for domestic use. Crushing in new season starts in last week of October in Karnataka and in last week of October to November in Maharashtra and in November in Uttar Pradesh. So generally, up to Nov, supply of sugar takes place from previous year stock.

Govt will allow sugar exports upto 100

Ethanol production capacities increased from 421 cr litrs to 867 cr litrs in last eight years

Export of sugar in current sugar season 2021-22 is 15 times of export as compared to export in sugar season 2017-18. The major importing countries are Indonesia, Afghanistan, Sri Lanka, Bangladesh, the UAE, Malaysia and African Countries.

In sugar seasons 2017-18, 2018-19 & 2019-20, about 6.2 LMT, 38 LMT & 59.60 LMT of sugar was exported. In sugar season 2020-21 against target of 60 LMT about 70 LMT have been exported. About Rs 14,456 Cr released to sugar mills in past five years to facilitate export of sugar and Rs 2000 cr as carrying cost for maintaining buffer stock. Since, the international prices of sugar are in uptrend & stable, so, contracts for export of about 90 LMT have been signed to export sugar in current sugar season 2021-22 & that too without announcement of any export subsidy; out of which 75 LMT have been exported till May 18, 2022.

In the current ESY 2021-22, about 186 cr ltrs ethanol have been blended with petrol till 08.05.2022 thereby achieving 9.9 per cent blending. It is expected that in current ethanol supply year 2021-22, we will be achieving 10 per cent blending target.

In sugar seasons 2018-19 , 2019-20 & 2020-21 about 3.37, 9.26 & 22 LMT of sugar was diverted to ethanol. In sugar season 2021-22, it is likely that about 35 LMT of excess sugar will be diverted to ethanol. By 2025, it is targeted to divert more than 60 LMT of excess sugar to ethanol, which would solve the problem of high inventories of sugar, improve liquidity of mills there by help in timely payment of cane dues of farmers.

In the sugar season 2021-22, sugarcane of worth Rs 1,10,000 crore is likely to be purchased by sugar mills which is at all time high level and is the second highest next to the procurement of paddy crop at Minimum Support Price.

For the current sugar season 2021-22, out of total cane dues payable of Rs 1,06,849 cr, about Rs. 89,553 cr was paid and only Rs 17,296 cr are pending as on 17.05.2022; thus 84 per cent of cane dues have been paid. The domestic ex-mill prices of sugar are also now stable & are in the range of Rs 32 -35/ kg which would enable sugar mills to make timely payment of cane dues to farmers in current sugar season 2021-22. The average retail price of sugar in the country is about Rs 41.50/ kg and is likely to remain in the range of Rs 40-43/ kg in coming months which is not a cause of worry.

Ethanol production capacities increased from 421 cr

In the current sugar season 2021-22, cane price payment of more than ₹1,00,000 crores would be made by sugar mills to farmers

Sugar production in the current sugar season 2021-22 is expected to be 13 per cent higher than the previous sugar season. As per the revised estimates production of sugar in the current sugar season, 2021-22 is estimated to be about 350 Lakh Metric Tonne (LMT) (after discounting the diversion of 35 LMT of sugar to ethanol) against estimated domestic consumption of about 278 LMT. There was a carry overstock of about 85 LMT at the beginning of the sugar season 2021-22.

Even after likely export of about 95 LMT, the closing stock for the current sugar season at the end of September 2022 is likely to be more than 60 LMT. The availability of sugar in the country is sufficient to meet domestic requirements. As such, there will be smooth availability of sugar and the sugar prices in the domestic market are expected to remain stable at reasonable levels.

A virtual meeting in this regard was held under the chairmanship of Secretary (F&PD), Government of India with the State Principal Secretaries (Sugar) and Cane Commissioners/Directors (Sugar) of the State Governments to assess the area under cane cultivation, Sugarcane and Sugar Production for Sugar Season 2021-22 (October-September) as well as export of sugar and diversion of sugar for the production of ethanol.

The government is also encouraging sugar mills to divert excess sugarcane to ethanol which is blended with petrol, which not only serves as a green fuel but also saves foreign exchange on account of crude oil import. In the last three sugar season 2018-19, 2019-20 and 2020-21 about 3.37 LMT, 9.26 LMT and 22 LMT of sugar have been diverted to ethanol. In the current sugar season 2021-22, about 35 LMT of sugar is estimated to be diverted & by 2024-25 about 60 LMT of sugar is targeted to be diverted to ethanol, which would address the problem of excess sugarcane as well as delayed payment issue as farmers would get timely payment.

From Ethanol Supply Year (ESY) 2013-14 (Dec – Nov) to ESY 2020-21, about ₹53,000 crore revenue has been generated by sugar mills/distilleries from the sale of ethanol to Oil Marketing Companies (OMCs). In the current ESY 2021-22, more than Rs 18,000 crore revenue is expected to be generated by sugar mills from the sale of ethanol to OMCs.

In the previous sugar season 2020-21, out of cane dues payable of Rs 92,938 crores, about Rs 92,480 crores cane dues have been paid to farmers, as on 18.4.2022. Thus, 99.5 per cent of cane dues of the previous sugar season have been cleared. In the current sugar season 2021-22, out of total cane dues payable of Rs 91,468 crores, about Rs 74,149 crores have been paid to farmers as on 18.4.2022 which is more than 80 per cent. It is expected that in the current sugar season, cane price payment of more than Rs 1,00,000 crores would be made by sugar mills to farmers. An increase in export and diversion of sugarcane to ethanol has expedited cane price payments to farmers.

In the current sugar season 2021-22, cane