31 January 2022, New Delhi: Closing stocks of sugar in the country are expected to be at their second lowest levels in the last 10 years at the end of 2021-22 sugar season that started from October 2021.
This should augur well for millers and help in clearing sugarcane dues accruing to farmers quickly, while also helping to ensure a steady price of the commodity in the open market because of reduction in stocks overhang.
According to trade sources, sugar inventory at the end of the 2021-22 season is expected to be 6.5-7.0 million tonnes after accounting for six million tonnes of exports, over 31 million tonnes of production and 3.4 million tonnes of sugar diverted towards production of ethanol.
In the 2020-21 sugar season, closing stocks of sugar was 8.2 million tonnes.
The last time when sugar closing stocks was lower than the expected levels in 2021-22 was in 2016-17 when closing stocks was around 3.4 million tonnes.
The stocks had dipped due to low production due to drought in Maharashtra.
Few weeks back, the Indian Sugar Mills Association (ISMA) in a press statement had said that as per their market reports in 2021-22 season so far around 1.7 million tonnes of sugar has been exported in the October to December period, while during the same period last year just around 0.45 million tonnes had been exported.
It added that amid news of a likely better upcoming season 2022-23 (April – March) in Brazil, the global price of raw sugar has fallen further and is currently reeling at an over 5-month low at around 18 cents/pound.
Indian mills were waiting for the opportune time and are in no hurry to enter into further export contracts beyond 3.8-4.0 million tonnes of which have already been signed so far, ISMA said.
Meanwhile, another industry body, the All India Sugar Trade Association (AISTA) said in a statement on January 27 that closing stocks of sugar in 2021-22 is expected to be around 7.2 million tonnes, assuming a production of 32 million tonnes and consumption of 27 million tonnes.
It said sugar consumption in the 2021-22 season is expected to rise by 2 per cent from 26.5 million tonnes.
Sugar End of season closing stock (mn tonnes)
*Expected; The sugar season runs from October to September; SourceL ISMA and other trade bodies