The sugar industry in India has seen a stabilization in domestic sugar prices, with current ex-mill prices reported at ₹37.5 per kilogram in Uttar Pradesh and ₹34 per kilogram in Maharashtra. According to a report by Centrum Broking, these prices are considered profitable for the industry, especially during the crushing season. Analysts anticipate a potential increase in sugar prices during the off-season, based on current market trends and past seasonal behavior.
For the 2023-24 sugar season, India has processed 295 million tonnes of cane, a slight decrease from the previous season's 305 million tonnes. However, the national sugar recovery rate has improved year-over-year to 10.15 percent, primarily due to reduced diversion of sugarcane for other uses. Consequently, Centrum Broking has revised its sugar production forecast upwards to 32 million tonnes for 2023-24, compared to 33.1 million tonnes in the prior season, with notable increases in Maharashtra's sugar production.
The overall outlook for India's sugar sector remains cautiously optimistic despite potential challenges. Government policies affecting ethanol production and the potential for increased sugar output could lead to higher inventory levels, potentially impacting sugar prices negatively. However, analysts believe that the sector has navigated through the worst of its challenges, with a stable market environment anticipated moving forward.