Informist, Friday, Jul. 25, 2025

By Taniva Singha Roy

MUMBAI – The Centre is likely to set sugar sales quota for August at 2.35-2.40 million tonnes, up from 2.20 million tonnes for July, market participants told Informist. The sales quota will be higher than this month as demand will revive in August owing to the upcoming festival season, they said. The government is expected to announce the August sales quota Monday.

The sugar sales quota set by the government for July was down 4.3% from 2.30 million tonnes in June and 8.3% from 2.40 million tonnes a year ago. The quantity was good enough for July as the monsoon commenced and demand for the sweetener is usually less during the month owing to reduced demand from bulk buyers such as ice-cream and cold drink manufacturers.

The quota for August will be higher at 2.35 million tonnes as there is high demand during this month, said Mukesh Kuvadia, secretary of the Bombay Sugar Merchants Association. "Prices will not fall despite a higher quota as demand will be firm throughout the month," Kuvadia said.

Seemal Sudhir Jain, secretary of the Kolhapur Karad Sangli Sugar Merchants Association, also expects the quota for June to be set at 2.35-2.40 million tonnes. "Prices will be on an upward trend even if the quota is 2.40 million tonnes as prices have been lower for a very long time and also as starting from August, festival season in India comences when there is firm demand for the sweetener from confectioners and other bulk buyers," Jain said. Prices are likely to stay at higher levels for the next three months, he added.

Due to a lower production outlook and falling demand, the sales quota was meagre in July, said Naresh Gupta, a trader from north India. But the demand will increase next month onwards ahead of the festivals, he said. Gupta expects the sales quota to be arround 2.30-2.35 million tonnes and prices to be higher than the current levels. A downtrend in sugar prices during August is unlikely, traders said.

The government fixes the maximum quantity of sugar available for sale every month to support prices and help mills clear the arrears of sugarcane farmers. The government also sets monthly sales quotas for each sugar mill. Sugar production in the sugar year 2024-25 (Oct-Sept) is estimated to decline to 26.1-26.2 million tonnes from 31.9 million tonnes last year, according to the All India Sugar Trade Association.

Additionally, the Indian Sugar and Bio-Energy Manufacturers Association has urged the government to allow an additional 1 million tonnes sugar exports in 2024-25 (Oct-Sept) season, citing weak domestic demand, depressed prices, lower sugar diversion for ethanol output, and comfortable closing stocks. The government had earlier permitted 1 million tonnes of sugar exports until September, of which over 600,000 tonnes have already been shipped. This could support the domestic prices of the sweetener.

In 2023-24, dispatches of sugar from India were high despite the government's ban on exports because of smuggling. These unofficial exports leaked from domestic sales, traders said. According to trade consensus estimates, between 700,000 tonnes and 1 million tonnes of sugar was smuggled, mostly to Bangladesh and Nepal. While raw sugar, refined sugar, white sugar, and organic sugar were restricted from exports, shipment of specialty sugars like pharmaceutical sugar were permitted, and smugglers took advantage of this.

This year, however, the Centre has reopened sugar exports. Despite the fall in production as of mid-April, the government appears to be comfortable with the current price levels and stock availability. It has not closed sugar shipments out of the country and has permitted 1 million tonnes of exports in the season ending September. End

Edited by Akul Nishant Akhoury

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