India's sugar production may drop slightly to 35.5 mt in the 2022-23 marketing year, starting October, because of the diversion of sugarcanetowards ethanol manufacturing. Still, there would be almost an 8-mt surplus for exports, according to industry data. 

Production during the current 2021-22 sugar season is estimated to be almost 36 mt.

Indian Sugar Mills Association (ISMA) on Friday released its preliminary estimates for sugar production for the 2022-23 marketing year. ISMA said sugar output is expected at 36 mt in the current marketing year ending September. Domestic consumption next year is estimated to be around 27.5 mt, the association said.

Net sugar production before considering diversion towards ethanol is estimated to be higher at almost 40 mt in 2022-23, against 39.4 mt in the current 2021-22 marketing year.

ISMA estimates that the diversion of cane juice and B-molasses to ethanol shall cut sugar production by about 4.5 mt during the next marketing year. In the current 2021-22 marketing year, about 3.4 mt of diversion has been estimated.

In May, the Centre capped sugar exports at 10 mt for the current 2021-22 marketing year to maintain domestic availability and price stability.

ISMA said that estimates have been made assuming normal rainfall and other optimum conditions during the remaining period.

Based on the satellite images procured in the latter part of June 2022, ISMA said that total acreage under sugarcane is estimated to be higher by 4 per cent to 5.82 million hectares in 2022-23.

During the current ethanol supply year (December-November) until July 10, ISMA said, total contracted quantity of ethanol stood at 4.42 billion litre and of this, 3.62 billion litre was supplied from the sugar industry.

Of 3.62 billion litre, ethanol manufactured from sugarcane juice and B-heavy molasses (BHM) stands at 3. 49 billion litre (0.79 billion litre from sugarcane juice and 2.70 billion litre from BHM), translating into a diversion of about 3.4 mt of sugar for ethanol production.