India is the world’s second-largest sugar producer after Brazil, but the country has been absent from export markets to guarantee local supplies as larger shares of its sucrose output are diverted to produce ethanol instead of sugar.
Wilmar projected on Monday that a total of 5 million metric tons of sucrose will be diverted to ethanol production in the 2024/25 season as India targets higher blending rates of ethanol into gasoline to reduce its oil imports.
As a result, the Asian trader estimates net sugar production to reach only 27.5 million tons in India, for a total country consumption of 29.5 million tons. The difference will come from stocks, which Wilmar projected to fall 2 million tons to 3.3 million tons at the end of the season.
“Sugar diversion to ethanol will lead India to a tight sugar S&D (supply and demand) this season,” the trader said in a note.
“In this context, it seems unrealistic to see India exporting sugar in 2024/25, rather there is a real risk of tightness by the end of the season in India (end October 2025), with lower stocks.” Brazil is expected to have a long between-crops period due to the drought this year that will delay crop development for 2025. Without Indian exports, other smaller producers will have to meet export demand in the first quarter of 2025.
Content Source: economictimes.indiatimes.com