Friday, November 22, 2024
HomesugarIncrease in ethanol production to prevent Indian sugar exports, says Wilmar

Increase in ethanol production to prevent Indian sugar exports, says Wilmar

The increase in ethanol production in India due to higher blending rates will reduce local sugar availability and prevent the country from exporting sugar in the 2024/25 season, Singapore-based commodities trader Wilmar said.

India is the world’s second-largest sugar producer after Brazil, but the country has been absent from export markets to guarantee local supplies as larger shares of its sucrose output are diverted to produce ethanol instead of sugar.

Wilmar projected on Monday that a total of 5 million metric tons of sucrose will be diverted to ethanol production in the 2024/25 season as India targets higher blending rates of ethanol into gasoline to reduce its oil imports.

As a result, the Asian trader estimates net sugar production to reach only 27.5 million tons in India, for a total country consumption of 29.5 million tons. The difference will come from stocks, which Wilmar projected to fall 2 million tons to 3.3 million tons at the end of the season.

“Sugar diversion to ethanol will lead India to a tight sugar S&D (supply and demand) this season,” the trader said in a note.

“In this context, it seems unrealistic to see India exporting sugar in 2024/25, rather there is a real risk of tightness by the end of the season in India (end October 2025), with lower stocks.”

Brazil is expected to have a long between-crops period due to the drought this year that will delay crop development for 2025. Without Indian exports, other smaller producers will have to meet export demand in the first quarter of 2025.

Sugar Times Team
Sugar Times Teamhttps://www.sugartimes.co.in
The Sugar Times Editorial Team is a group of experienced journalists, analysts, and industry experts dedicated to providing in-depth coverage and insights on the global sugar industry. With years of experience in agriculture, trade, sustainability, and market trends, the team brings a wealth of knowledge and expertise to every article they produce.Focused on delivering accurate, timely, and relevant news, the Sugar Times Editorial Team aims to keep industry professionals, stakeholders, and enthusiasts informed on key developments in sugar production, trade policies, innovations, and sustainable practices. Their collective goal is to help readers navigate the complexities of the sugar sector and stay ahead of emerging trends shaping the future of the industry.You may submit your article on info@sugartimes.co.in if you have valuable contributions for the industry readers.
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