The sugar production is estimated at 3.41% lower at 31.68 million tonne (MT) in the next season (October-September) compared to 2022-23 season because of higher diversion of sugarcane for ethanol production, Indian Sugar Mills Association (ISMA) on Wednesday said.
In the current season, sugar production is estimated at 32.8 MT.
As per the preliminary estimate by ISMA, about 4.5 MT of sugar will be diverted towards the ethanol production next season against 4.1 MT in the current season.
Area under sugar cane in the country is estimated to be around 5.98 million hectare in 2023-24 season, at the same level as the current season.
ISMA has stated that domestic sugar consumption at 27.5 MT thus implying a surplus of 4.2 MT.
In the current season, the government has decided not to approve a second tranche of sugar exports beyond 6 MT. This follows inputs received by the food ministry on the crop prospects from the various key sugarcane producing regions.
India has exported 6 MT of sweetner this season. Indonesia, Bangladesh, United Arab Emirates and Djibouti have a major share in the total sugar exports.
In 2021-22 season, India had exported a record 11.2 MT of sugar
In June, the had approved a 3% hike in fair and remunerative price (FRP) of sugarcane to be paid to farmers for the 2023-24 season to Rs 315/a quintal in comparison to previous year. Increase in FRP applicable from the crushing season commencing from October 1 subject to base sugar recovery of 10.25%.
ISMA had earlier urged the government to increase the minimum selling price (MSP) of sugar from the current level of Rs 31/kg to at least Rs 36-37/kg in commensurate with hike in the FRP of cane.
In June, 2018 the government had introduced the concept of MSP of sugar so that industry could get at least the minimum cost of production of sweetener so as to enable them to clear cane price dues of farmers.
Meanwhile, ISMA in a communication to the department of food and public distribution has urged the government to increase the price of ethanol extracted from sugarcane by Rs 4.25/litre to Rs. 69.85/litre for achieving the government’s target of 20% blending with petrol.
Currently around 11% blending of ethanol with petrol has been achieved so far. ISMA has stated that increase in ethanol price is essential as the industry needs to invest around Rs 17,500 crore to raise manufacturing capacity.