Sugar stocks fall by 25% at nearly 7 million tonnes

Lower output and higher exports last year are the main reasons

India's sugar stocks have declined by 25 per cent to 6.92 million tonnes at the beginning of the new marketing year that started this month due to lower output and higher exports last year.

Sugar stocks stood at 9.3 million tonnes (MT) as on October 1 2013. The marketing year runs from October- September.

Although the stocks of sweetener have reduced, they are still nearly 2 MT higher than what is required for meeting the domestic demand till production from new crushing season comes into the market.

According to government estimates sugar stocks stood at 6.92 MT as on October 1, 2014, sources said.

This is lower than the Indian Sugar Mills Association (ISMA) projection of 7.4 MT of opening stock at the start of this month.

The stocks have come down significantly as sugar output of India, the world's second largest producer, fell to 24.3 MT in 2013-14 marketing year from 25.1 MT in the previous year.

Moreover, sugar exports jumped to 2.1 MT last marketing year from just 0.34 MT in 2012-13 on the back of incentives provides by the Centre on shipments of raw sugar. Domestic consumption, too, went up at 24 MT in 2013-14 from 23 MT in the previous year.

"ISMA is estimating 7.2-7.5 MT of sugar opening stocks on 1st October, 2014, which is about 2.5 MT higher than what the country needs till the time new production of 2014-15 comes into the market," the association had said in a statement last month.

For the new 2014-15 marketing year that started this month, ISMA has projected the country's sugar production at 25-25.5 MT.