InvestorQ : How do you see the performance of sugar industry this year after COVID-19?
Archita Jajjoo made post

How do you see the performance of sugar industry this year after COVID-19?

Answer
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Niti Shenoi answered.
1 month ago


Despite the pain of COVID in 2020, the sugar industry should have a good year. Remember, sugar follows a unique sugar season year that extends from October to September and is popularly called the sugar cycle in India.

For the current sugar cycle, domestic sugar consumption is likely to fall by 9% due to a sharp fall in industrial consumption. However, that is expected to be made up for by a 30% surge in exports of sugar, especially to South Asian and South East Asian countries.

Let me quickly get back to industrial demand. The Industrial demand for sugar is expected to fall by 10% as biscuit factories, hotels and cafes have remained shut for prolonged periods. The industrial sector accounts for 60% of the sugar consumption in the year.

Household consumption, which is remaining 40%, may fall 2%. But the thrust come from exports of sugar. India is expected to export 5 million tonnes this year supported by cost subsidies provided by the Indian government in the midst of industry objections.

India could benefit from weak output in Thailand, a major sugar producing country. The fall in Thai sugar output has driven many of its traditional customers like Indonesia, Kenya, Iran and Bangladesh to buying sugar from India. That could work in India’s favour.