India’s sugar opening inventory could exceed 7 mt regardless of export allowance: Ravi Gupta

The sugar sector has witnessed vital progress over the previous decade. Sugarcane manufacturing has elevated steadily, with a Compound Annual Progress Fee (CAGR) of three.5 per cent over the past two years. Moreover, sugarcane costs have seen a CAGR enhance of 5 per cent, leading to extra revenue for farmers. The federal government’s ethanol mixing initiative has been instrumental in remodeling surplus sugar into ethanol, with a mixing price of 12 per cent already achieved (in ESY 2022-23). This shift in direction of ethanol manufacturing signifies a constructive trajectory for the sugar business.

Wanting forward, we must always deal with sustainable progress throughout the sugar sector. This entails maximizing sugarcane yield on present land whereas conserving sources. Emphasizing micro-irrigation, farm mechanization, and varietal enchancment is essential, particularly in areas like Maharashtra and Karnataka, to mitigate manufacturing volatility. There may be additionally a have to align the minimal promoting worth of sugar with sugarcane costs to make sure the holistic improvement of the business.

Although sugarcane costs have elevated by 5 per cent within the final 12 months, the rise is lower than 2 per cent for sugar. A super mechanism could also be discovered during which each the honest and remunerative worth of cane and the minimal promoting worth of sugar are introduced collectively.

The 15 per cent was an interpolated quantity to attain the principle goal of 20 per cent by 2025-26. Regardless of the present ethanol mixing price of 12 per cent, it’s important to acknowledge the achievement, contemplating challenges like a weak monsoon. Authorities intervention, corresponding to adjusting maize-ethanol costs, has boosted ethanol manufacturing from grains to compensate for the lesser contribution from the sugarcane sector. With subsequent 12 months’s anticipated surplus sugar inventory, attaining the goal price appears possible.

To realize the 20 per cent goal, we must always put together infrastructure prematurely, together with ethanol- meting out petrol stations and flexi-fuel automobiles.

The priority about ethanol availability shouldn’t exist. India already produced 39 million tonnes (mt) of gross sucrose in 2021-22, which is 10 mt larger than consumption. In addition to, ethanol from grain-based vegetation is rising. There shall be sufficient ethanol to feed flexi-fuel automobiles. This may even give prospects the flexibleness to go for environment-friendly ethanol from petrol.

Beneficial monsoon forecasts and up to date rains within the Marathwada area bode effectively for the upcoming sugarcane crop. Whereas I chorus from speculating on subsequent 12 months’s sugar manufacturing, the prospect of one other surplus harvest is promising. This surplus can contribute to increasing ethanol capability.

We appear to be including 3 mt of sugar to ending shares as of September 30, 2024. Due to this fact, an export of one million tonnes ought to be permitted even within the present season. This can nonetheless go away greater than snug opening steadiness of over 7 mt as of October 1, 2024. That mentioned, the federal government’s precedence stays prioritizing sugar for home consumption, adopted by ethanol manufacturing after which exports.