The government on Monday allowed the exports of 1 million tonnes (MT) of sugar in the ongoing 2024-25 (October-September), after taking into consideration domestic availability. Exports of the sweetener had been banned since the last season.
“This ensures price stability, supports 5 crore farmers families, 5 lakh sugar mills workers and strengthens the sector,” food minister Pralhad Joshi said in a social media post in X.
“Export quotas of 1 MT have been pro-rated amongst those sugar mills which operated in at least one sugar season amongst the last three sugar seasons by taking into account their average production of sugar during the last three operational sugar seasons — 2021-22, 2022-23 and 2023-24,” according to a food ministry notification.
The ministry has allocated the sugar exports quota amongst 518 mills on the basis of their production capacity. AIl the sugar mills have been allocated a uniform export quota of 3.174% of their last three year average output of sweetener.
India exported 6 MT of sugar in the 2022-23 season and since then the government had not allocated any quota for sugar export.
“The move to allow export will make the country’s sugar balance sheet healthy and aid sugar mills by enhancing financial liquidity, ensuring timely payments to sugarcane farmers,” Deepak Ballani, Director General, Indian Sugar & Bio-Energy Manufacturers Association (ISMA) told FE.
ISMA had urged the government to allow around 2 MT of sugar exports in the current sugar season so that mills don’t have to incur the carrying cost of surplus sweetener due to expectation of better harvest and comfortable opening stocks.
“The sugar mills are going through liquidity issues due to lower sugar prices in the Indian market and the move to allow export will stabilise the prices and help generate additional income for the mills,” Uppal Shah, founder and managing director, Agri mandi live, a research and consultancy firm.
Meanwhile, the stock prices of the major sugar companies in BSE rose between 3.91% to 1.28% on Monday from the previous closing last week
The stock prices of Mawana Sugar rose by 3.9% to Rs 100.89 Monday against Rs 97.09 on Friday last week. Similarly shares of Bajaj Hindustan, Shree Renuka Sugar and Balampur Chini rose by 2.38%, 1.83% and 1.28% respectively on Monday compared to previous closing.
“While allowing exports benefits the industry, a revision of ethanol prices, the establishment of a structurally predictable pricing mechanism are far more critical for the industry,” Avantika Saraogi, executive director, Balrampur Chini Mills, said
According to the food ministry projection, the sugar production is estimated for 2024-25 sugar season to be around 32 MT while domestic consumption would be 27 MT. The government has allotted 4 MT of sugar to be diverted to ethanol manufacturing.
Opening stock of sugar on October 1, 2024 was 7.9 MT against a norm or safety net of 5.5 MT according to the food ministry. For 2023-24, sugar production is estimated at 32 MT.
At the beginning of the current fiscal, the food ministry has 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.
Sugarcane sowing in the last kharif season was 5.76 million hectare, higher than previous year. India, the second biggest sweetener after Brazil, used to ship sugar to countries including Indonesia, Bangladesh and the United Arab Emirates.
Inflation in sugar has been in the single digit for the last many years.