Sugar offtake in the current sugar season (October 2019-September 2020) is expected to remain more or less at last season levels despite the Covid-19 pandemic as buoyant exports make up for a visible shortfall in domestic consumption.
“Industrial demand for sugar, which accounts for ~60% of total domestic consumption, is expected to fall 8-9% in SS 2020 due to hotels, restaurants and cafes remaining shut and people avoiding crowded places,” said Crisil.
Household consumption, which accounts for the remaining 40% or so, however, is expected to slip just 2-3%. Prolonged confinement at home has seen a surge in appetite for biscuits and bakery products. Also, consumers are likely to prefer packaged sweet products, such as chocolates and cookies over loose sweets in the upcoming festive season for fear of contamination.
The research note of Crisil added: “The shortfall in overall domestic demand, however, will be more than made up by exports, which are expected to spurt more than 30% to ~5 million tonne in SS 2020. This is mainly because of lower production in Thailand, which has turned its key importers – Indonesia, Kenya, Bangladesh, Afghanistan and Iran – towards India.”