Sudhanshu Pandey, the food secretary, announced Wednesday that the government would soon announce an export quota for sugar for next year (2022-23) which will begin on October 1, 2022.
He did not reveal the amount of sugar that would be allowed to ship. India exported 11.2 mt sweetener, a record for the 2021-22 season. In the previous marketing year, 7.1 mt was exported.
Pandey stated that the Indian Sugar Mills Association (Isma), and Datagro would soon determine the sugar exports allowed for next season.
Aditya Jhunwala, President, Isma, called on the government to accelerate the sugar export policy. She stated that at least 8 million tonnes of sugar must be exported by 2022-23, taking into account production estimates.
Isma estimates that sugar production will be 40 mt, while approximately 4.5 mt would go for ethanol production. Domestic consumption would be about 27.5 mt.
Jhunjhunwala stated that any of the two systems used in sugar exports over the past two years should be allowed by the government. The government had already followed the indicative minimum export quota for 2020-21 and the open general licensing system for 2021-22.
He stated that exports of approximately 8 mt surplus sugar would be necessary to meet domestic demand. “This would also help maintain domestic sugar prices, which would boost the liquidity of mills and ensure that farmers get paid on time for their sugarcane.”
The sugar production for 2021-22 will be greater than 36 million tonnes, compared to an earlier estimate of 35 million.
The sugar industry also requested financial support to increase ethanol production. In fact, the government has set a goal of blending 20% petrol and ethanol by 2025. Currently, 10% is made up of petrol and ethanol.
For ethanol production to reach the 20% blend target, it will require an investment of over Rs 10,000 crore.
The sugar industry contributes approximately 370 million litres to the country’s 430 litres of ethanol.
ISMA also requested that the government increase the minimum support price of sugar (MSP) from Rs 31 per kilogram to Rs 36-37 per kilogram, in line with an increase in fair and remunerative prices (FRP). The MSP for sugar was announced last February 2019.
Jhunjhunwala stated that the government had set MSP for sugar at Rs 31 per kilogram in February 2019, when sugarcane FRP was Rs 275 per quintal. The FRP of sugarcane increased by two times since then.
He stated that 85% of the sugar mills revenue comes from sugar sales, so it is important to pay the farmers the cane price.