Indian Sugar Sector - Government Raises Sugar Surplus Estimate To Seven Million Tonne: Systematix
In Sugar Season (Oct-Sep) 2022-23, India is expected to produce 33.6 mt sugar down 6.4% YoY as per latest government estimates.
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Systematix Research Report
In Sugar Season (Oct-Sep) 2022-23, India is expected to produce 33.6 million tonne sugar down 6.4% YoY as per latest government estimates. The lower sugar production is attributable to higher diversion of ~5.0 million tonne (up 39% YoY) for ethanol production and lower yields in Maharashtra and Karnataka.
Thus, total sucrose production in the country would be 38.6 million tonne (down 2.3% YoY). This is the second highest sugar production in the country in the last five years.
The sugar opening inventory has been revised upwards by the government from 6.1 million tonne to 7 million tonne after physical verification was carried out by the authorities.
With domestic consumption of 27.5 million tonnes and exports of 6.1 million tonnes, we expect a closing inventory flat YoY at 7.0 million tonnes in sugar season 23, which is equivalent to ~three months of domestic demand.
Typically, the government would be content with holding 2.5 months of inventory which is ~5.8-6 million tonne. Thus, we believe there is an opportunity to export an extra 1 million tonne sugar.
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