The sugar industry has urged the government to allow around 2 million tonne (MT) of exports of the sweetener in the current season (October-September) so that mills don’t have to incur the carrying cost of surplus due to expectation of better harvest and comfortable opening stocks.
According to Deepak Ballani, Director General, Indian Sugar Mills and Bio-Energy Manufacturers Association (ISMA), despite the projection of a small drop in the sugar production in the current season compared to previous year, the sugarcane yield and prospects of a better recovery has improved significantly because of adequate monsoon rains.
ISMA in its first advance estimate of the sugar production for 2024-25 season has projected the gross output of sweetener including diversion for ethanol is likely to be 33.3 MT against the 34.1 MT in the previous season.
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With an opening stock of 8.47 MT on October 1, net availability of sugar for the current season is projected around 41.7 MT against an anticipated domestic consumption of 29 MT.
“With 4 MT of sugar to diverted for ethanol production and safety stock of 5.5 MT for two month’s consumption would leaves around 3 to 3.3 MT of surplus sweetner with the company,” Ballani told FE while adding that surplus stocks would result in losses for manufacturers which may affect the farmers payment for the sugarcane purchase
Earlier, India exported 6 MT of sugar in the 2022-23 season and since then the government has not allocated any quota for sugar export. Food ministry has earlier ruled out providing any quote for sugar export in the current season as they are closely watching the supply situation as crushing of sugarcane has commenced.
“Sufficient availability of sugar will not only ensure a comfortable stock for domestic consumption and sustain the ethanol blending program, but also open the room for exports, contributing to maintain the financial liquidity of sugar mills, enabling timely payments to farmers,” according to an ISMA note.
Alok Saxena, executive director, Zuari Industries, a leading sugar as well as ethanol manufacturers from Uttar Pradesh said while the fair and remunerative price (FRP) for sugarcane continues to rise, the minimum selling price (MSP) for sugar has remained stagnant, squeezing margins of the companies.
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