Volume, realisations to drive gains for sugar majors

The sugar industry had flat production year-on-year (Y-o-Y) in the fourth quarter of 2024-25 (Q4FY25) at around 6.8 million tonnes.

- DEVANGSHU DATTA

But higher realisations per tonne could drive March quarter results. The government allowed export of 1 million tonnes, which was a boost. The industry enjoyed an up to 10 per cent increase in ex-mill prices, and prices may stay firm going into off-season with overall production falling 18 per cent to 26 million tonnes (post diversions) until March 31.

The National Federation of Cooperative Sugar Factories (NFCSF) expects pan-India sugar production to reduce 19 per cent to 26 million tonnes (post diversion to ethanol), due to a 25 per cent decline in sugar production in Maharashtra and a 10 per cent drop in Uttar Pradesh (UP).

The production estimate has been revised downwards from earlier estimates. Cane crushing was lower across key states of Maharashtra, Karnataka, and UP, leading to an 11 per cent decline in pan-India cane crushing volume to 265.3 million tonnes until March 31.

The aggregate recovery rate of sugar from cane crushing is around 9.4 per cent, which is around 78 basis points (bps) contraction Y-o-Y.