100 LMT Sugar exported and 35 LMT sugar diverted to Ethanol in 2021-22

Aug 6, 2022 | Business


During past few years, sugar production in the country has been consistently more than the domestic consumption thereby creating surplus situation. With a view to address the problem of surplus sugar in the country, the Central Government has been encouraging sugar mills during the last few sugar seasons to divert surplus sugar to ethanol and is also facilitating mills to export surplus sugar thereby improving liquidity of sugar mills enabling them to clear cane price dues of farmers. Export of sugar and diversion of sugar to ethanol during the recent times has also helped in maintaining demand-supply balance and stabilizing domestic sugar prices. Details of sugar export and diversion of sugar to ethanol since sugar season 2018-19 (October-September) are as under:


{in Lakh Metric Ton (LMT)}







Sugar Season

2018-19

2019-20

2020-21

2021-22

Diversion of sugar to Ethanol

 3

9

22

35

Exports

38

59

70

100


(as on 01.08.2022)




            In view of the macro scenario going across the globe, any uncontrolled export from India beyond the comfortable limit could have created scarcity; and local prices could spike during the period of September-November, 2022. The government is also concerned about food inflation. Therefore, with a view to ensure sufficient availability of sugar for domestic consumption within the country at reasonable price, Government in May, 2022 has imposed restrictions on export of sugar beyond 100 LMT; and exporters as well as sugar mills were issued Export Release Orders (EROs) upto 10 LMT for export in June, 2022. As on 01.08.2022, about 100 LMT has been exported.


            However, there have been changes in the stock position of sugar since the time of imposition of restrictions in May, 2022, like increase in sugar production and decrease in sugar consumption due to weak demand of sugar in domestic market. Crushing of sugarcane generally commence by end of October or 1st week of November; however, in the ensuing sugar season 2022-23 due to sufficient availability of sugarcane, crushing of cane is likely to commence in 1st to 3rd week of Oct, 2022; and new sugar would start coming in the market from mid of October, 2022. Thus, opening stocks of 60 LMT in the ensuing sugar season would be sufficient to keep the domestic prices under control.


            Therefore, the position was reviewed by the Government in last week of July, 2022 and it has been decided to allow export of sugar upto 112 LMT in the interest of sugarcane farmers and sugar industry. Even after export of sugar upto 112 LMT, closing stock of 60 LMT would be maintained & as crushing in Maharashtra, Karnataka and other states would commence from 1st to 3rd week of October, 2022; there would be sufficient availability of sugar in the country at reasonable price & retail price would likely to remain stable.


     Export of sugar of 100 LMT till 1.08.2022 in the current sugar season has helped in improving liquidity of sugar mills by Rs. 33,000 Crore enabling them to clear cane price dues of farmers. Further export of sugar of 12 LMT would help in improving liquidity of sugar mills by Rs. 3600 Crore enabling them to clear cane price dues of farmers which stood around Rs. 9700 Crore as on 04.08.2022. Export of sugar to this extent would also help in earning foreign exchange and would help in reducing trade deficit.


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Sugar Production in the current sugar season 2021-22 is expected to be 13% higher than the previous sugar season: Centre

Apr 20, 2022 | Business


Sugar production in the current sugar season 2021-22 is expected to be 13% higher than the previous sugar season. As per the revised estimates production of sugar in the current sugar season 2021-22 is estimated to be about 350 Lakh Metric Tonne (LMT) (after discounting diversion of 35 LMT of sugar to ethanol) against estimated domestic consumption of about 278 LMT. There was carry over stock of about 85 LMT at the beginning of the sugar season 2021-22.


Even after likely export of about 95 LMT, the closing stock for the current sugar season at the end of September 2022 is likely to be more than 60 LMT.  The availability of sugar in the country is sufficient to meet the domestic requirement. As such, there will be smooth availability of sugar and the sugar prices in the domestic market are expected to remain stable at reasonable levels.


A virtual meeting in this regard, was held under the chairmanship of Secretary (F&PD), Government of India with the State Principal Secretaries (Sugar) and Cane Commissioners/Directors (Sugar) of the State Governments to assess area under cane cultivation, Sugarcane and Sugar Production for Sugar Season 2021-22 (October-September) as well as export of sugar & diversion of sugar for production of ethanol here today.


            Government is also encouraging sugar mills to divert excess sugarcane to ethanol which is blended with petrol, which not only serves as a green fuel but also saves foreign exchange on account of crude oil import. In last 3 sugar seasons 2018-19, 2019-20 and 2020-21 about 3.37 LMT, 9.26 LMT and 22 LMT of sugar has been diverted to ethanol. In the current sugar season 2021-22, about 35 LMT of sugar is estimated to be diverted & by 2024-25 about 60 LMT of sugar is targeted to be diverted to ethanol, which would address the problem of excess sugarcane as well as delayed payment issue as farmers would get timely payment.


            From Ethanol Supply Year (ESY) 2013-14 (Dec – Nov) to ESY 2020-21, about ₹53,000 crore revenue has been generated by sugar mills/distilleries from sale of ethanol to Oil Marketing Companies (OMCs). In the current ESY 2021-22, more than ₹ 18,000 crore revenue is expected to be generated by sugar mills from sale of ethanol to OMCs.


            In the previous sugar season 2020-21, out of cane dues payable of ₹ 92,938 crores, about ₹ 92,480 crores cane dues have been paid to farmers, as on 18.4.2022. Thus, 99.5% cane dues of previous sugar season have been cleared. In current sugar season 2021-22, out of total cane dues payable of ₹ 91,468 crores, about ₹ 74,149 crores have been paid to farmers as on 18.4.2022 which is more than 80%. It is expected that in the current sugar season, cane price payment of more than ₹ 1,00,000 crores would be made by sugar mills to farmers. Increase in export & diversion of sugarcane to ethanol has expedited cane price payments to farmers.


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