Indian sugar mills may achieve their target of exporting 7.5 million tonnes of sweetener in 2021-22. The industry is witnessing an upward trend from the prior season’s 7.1 million tonnes export. So far, India has signed contracts for 6.3 million tonnes in the current season and new contracts are coming in the way for India with each passing hour. Along with this, Indian sugar production is likely to touch a sky-high range of 33.3 million tonnes in F.Y. 2021-22, up from the prior season of 31.2 million.
Sugar is one of the most prominent commodities produced and consumed across the globe. The sugar prices in the international market are extremely volatile as a handful of countries focus on sugar export apart from consuming domestically. In this, Brazil dominates the group, with Thailand, Australia and Mexico being in the line of leading sugar exporters. India is the second-largest producer of sugar in the world next to Brazil.
Witnessing an Upward Trend
Indian Sugar Mills Association (ISMA) stated that the YoY (Year-on-Year) production of sugar rose to 5.6% till 31st January 2022. Further, ISMA also highlighted that 507 sugar mills were operating in the country as of 31st January 2022, responsible for producing 187.08 million tonnes of sugar. Compared to the previous season, this production accounts for 10.02 lakh tonnes more, for the same period. A state-wise look at the sugar production includes:
– Maharashtra – 72.90 million tonnes (MT) until 31st January 2022, a 9.10 MT increase. There are 194 sugar mills working in the current (2021-22) sugar season, compared to 182 mills functioning last season.
– In Uttar Pradesh, 120 sugar mills are in operation, producing 50.33 million tonnes of sugar compared to 54.43 million tonnes last year.
– In Karnataka, 72 sugar mills were operational producing 3.87 MT compared to 3.45 MT.
– Gujarat – 15 mills are currently in operation and have produced 9.15 lakh tonnes of sugar.
– In Tamil Nadu, 26 sugar mills have produced 5.75 lakh tonnes of sugar, as compared to 4.16 lakh tonnes produced by the same number of sugar mills in the year 2020-21
Budgetary Allocation
For the sugar industry, there is an increase in the Budget Allocation in FY22 by about Rs. 2,507 crore. This is done in view to settle claims of sugar mills and provide assistance in exports. This will also help in reducing cane prices eventually helping the farmers. In order to support the Ethanol Blending Program (EBP), the government has set aside Rs.160 crore in FY22 and another Rs. 300 crores in FY23 for providing financial assistance to sugar mills for the enhancement and augmentation of ethanol production capacity.
How the roadmap planning will be useful? The allocation will aid in managing the surplus sugar, and further reduce the burden of the net oil import bill of the country.
Ethanol Production
ISMA, in a statement, mentioned that on the heels of ethanol production, 113.7 crore litres have been supplied as of 13th March 2022 as against the total Letter of Intent (LOI) quantity of 416.33 crore litres.
Out of the total supply so far, about 86% comprises ethanol derived from sugarcane juice/ molasses – the residue material from the production of sugar.
The government has been concerting efforts by encouraging diversion of excess sugarcane and sugar to ethanol for blending purposes which not only reduce import dependency on crude oil, promote ethanol as a fuel that is indigenous and environment-friendly and will also enhance the income of sugarcane farmers.
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