Sugar production in India for the 2024-25 season is expected to face a significant decline, primarily due to challenges in sugarcane cultivation. The Central Government's first advance estimate predicts a decrease of 132.28 lakh tonnes in sugarcane production, dropping from 4531.58 lakh tonnes to 4399.30 lakh tonnes.

However, industry analysts warn that the actual production could be even lower than the government's estimate, as the sugarcane crop has been severely affected by diseases, insect infestations, and natural disasters in the major producing states of Uttar Pradesh, Maharashtra, and Karnataka.

In Uttar Pradesh, specifically in the Moradabad division, the crop has been hit by red rot disease and attacks by the top borer insect.

These factors have led to a sharp decline in the average yield, further reducing sugar production potential. The sugar production for the months of October and November 2024 was notably weak, with a 35.4% national decline, particularly in Maharashtra and Karnataka.

Additionally, the rising demand for ethanol production could exacerbate the situation. During the 2023-24 season, about 21 lakh tonnes of sugarcane were diverted for ethanol production, but this is expected to increase to over 40 lakh tonnes in 2024-25.

This shift will directly reduce the quantity of sugar available for food consumption, further straining the sugar market. Furthermore, the attractive market prices for jaggery and khandsari are likely to encourage greater use of sugarcane for these products, further reducing sugar availability.

While there is no immediate concern over sugar availability in the current 2024-25 marketing season due to high previous stock levels, the imbalance between supply and demand may intensify as production decreases.