Commodity Outlook – Sugar

Sowing period (Sugarcane): September to January
Harvesting period (Sugarcane): February to April
Crop season: Kharif

Key growing regions:

  1. Uttar Pradesh – Aligarh, Muzaffarnagar, Ghaziabad, Lakhimpur
  2. Maharashtra – Kolhapur, Pune, Ahmednagar, Aurangabad, Nanded, Amaravati, Nagpur
  3. Karnataka – Belgaum, Bagalkot, Bijapur, Mandya, Mysore, Chamrajnagar, Bidar
  4. Tamil Nadu – Modak, Attur, Gullapuram, Sankarapuram, Arantangi

Production trend and Stock position:

  • As per the Ministry of Agriculture third advance estimate released on May 25, 2021, Sugarcane production for FY 2020-21 was 3,927.97 lakh metric tonne (LMT) compared to FY 2019-20 which was 3,705 LMT, up by 6.02 percent
  • According to Ministry of Agriculture, the sowing acreage of Sugarcane as on July 16, 2021 was 53.70 lakh hectares (lh) up by 1.67 percent compared to 52.82 lh during the corresponding period
  • According to Indian Sugar Mills Association (ISMA), Sugar mills have produced 306.65 LMT of sugar till June 16, 2021
  • The government has decided to advance the ethanol blending target to 2025, which was earlier scheduled for 2030. Previously ethanol was produced only in sugar-growing states but now it is produced across the country with the setting up of foodgrain waste distillers and agricultural waste ethanol plants
  • According to the Indian Sugar Mills Association, Letters of Intent (LOI) had been issued by Oil Marketing Companies for 346.52 crore litres of ethanol for the Ethanol supply year 2020-21. Out of the contracted 321.18 crore litres 145.38 crore litres of ethanol has been supplied till May 24, 2021
  • India has exported 58 LMT of export contracts against Maximum Admissible Export Quota (MAEQ) of 60 LMT of sugar for 2020-21 fixed by the government
  • The Department of Food & Public Distribution has allocated 22 LMT monthly sugar sales quota for July 2021 which is 1 LMT higher than that of July 2020
  • According to Food and Agriculture Organization, World Sugar production is estimated at 170.3 million metric tonnes (MMT) in 2020-21 sugar season with a decline of 1.6 MMT
  • European Union’s sugar production was up by 6.90 percent forecasted at 15.5 MMT for 2021- 22 as compared to last year’s production which was at 14.5 MMT

Monsoon Update

For the country as a whole, cumulative rainfall during this year’s monsoon season till July 14, 2021 is below Long Period Average (LPA) by 5 percent. Details of the rainfall distribution over the four broad geographical regions of India are given below:

Market commentary: Price outlook

  • Overall Sugar prices are likely to trade rangebound to slightly weak in immediate /short term
  • Currently international prices of sugar in global markets have been down as it had been rising since the past couple of months due to demand for ethanol which was expected to increase and some countries shift towards more ethanol which would have an impact on sugar production

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