The Indian sugar industry, a crucial segment of the nation’s agricultural economy, is currently grappling with multiple challenges and opportunities. Despite a projected surplus of 3.6 million tonne of sugar, the sector faces restrictions on exports, stagnant minimum selling prices, and evolving demands for biofuels.
According to Claudiu Covrig, Founder of Covrig Analytics, the right moment for India to export might come around Q2 2025, when prices could stabilise above $550-$600 per tonne.
Speaking to CNBC-TV18’s Manisha Gupta, he noted that while Indian mills are eager to export due to large domestic stocks, the current global market conditions are unfavourable. With Brazil’s massive production, adding Indian sugar to the market could lead to a price collapse.
Covrig also praised India’s rapid advancements in the biofuels area, especially ethanol, noting that the country has achieved significant blending mandates by diverting about 2 million tonnes of sugar to ethanol production. “No country in the world did this in such a short time,” he remarked.
Covrig advocated for the introduction of flex-fuel cars in India, which could further boost ethanol demand and provide a flexible response to fluctuations in sugar and ethanol production.
Meanwhile, Somnath Chatterjee, Head of Procurement & Logistics at ITC highlighted that the Indian sugar consumption continues to grow at a healthy clip of around 4-5%. However, he pointed out that unofficial exports to neighbouring countries, particularly Bangladesh are adding to sugar demand.
Reflecting on the recent union budget, Chatterjee acknowledged its long-term strategic focus on agriculture. While immediate impacts might be limited, he pointed out that initiatives to improve the supply chain, preserve quality, and enhance cold storage facilities for horticultural crops are steps in the right direction.