According to the Indian Sugar Mills Association (ISMA), increasing sugarcane diversion for ethanol production is expected to result in a 3.41% decrease in sugar production, or 31.68 million tonne (MT), in the upcoming season (October-September), compared to the season 2022-2023.
It is anticipated that 32.8 MT of sugar will be produced this season. According to an early projection by ISMA, 4.5 MT of sugar, up from 4.1 MT this season, will be diverted to the manufacturing of ethanol. At the same level as the current season, the country’s area planted with sugar cane is predicted to be 5.98 million hectares in 2023–24. According to ISMA, domestic sugar consumption is 27.5 MT, which implies a 4.2 MT surplus.
The administration has decided not to sanction a second tranche of sugar exports above 6 MT during the current season. This comes after the food ministry’s receipt of information on crop prospects from the different important sugarcane-producing regions. This season, India has exported 6 MT of sweetener. A significant portion of the world’s sugar exports are sent from Indonesia, Bangladesh, the United Arab Emirates, and Djibouti.
The fair and remunerative price (FRP) of sugarcane to be paid to farmers for the 2023–24 season was approved in June, increasing by 3% to Rs 315 per quintal from the previous year. An increase in FRP will be effective starting with the crushing season on October 1 with a base sugar recovery of 10.25%.
ISMA has previously advised the government to raise sugar’s minimum selling price (MSP) from its existing level of Rs 31 per kilogram to at least Rs 36 or 37 per kilogram in order to keep pace with an increase in the FRP of cane.
In the meantime, ISMA has recommended the government to raise the price of sugarcane ethanol by Rs. 4.25/liter to Rs. 69.85/liter in order to meet the government’s aim of 20% blending with petrol in a correspondence to the Department of food and public distribution.
Currently, ethanol has been blended with petrol to a current level of about 11%. According to ISMA, a price hike for ethanol is necessary because the sector has to invest about Rs 17,500 crore to enhance manufacturing capacity.
