Sugar Exporters

India Exports 10.98 Million Tonnes of Sugar in 2021-22 to Become The World’s 2nd Largest Sugar Exporter

India Exports 10.98 Million Tonnes of Sugar in 2021-22 to Become The World’s 2nd Largest Sugar Exporter
  • India emerges as the world’s largest producer and consumer of sugar and the world’s 2nd largest exporter of sugar.
  • The country records the highest sugar exports of 10.98 million metric tonnes
  • Sugar mills produced 35.9 million tonnes of sugar 
  • 95% of sugarcane dues cleared for this season
  • Sugar mills/distilleries generate $2.88 Billion from the sale of ethanol

In this sugar season (Oct-Sept) of FY2021-22, India recorded sugarcane production of more than 500 million metric tonnes. Out of which 357.4 million metric tonnes of sugarcane was crushed in the mills to produce about 39.4 million metric tonnes of sugar. With this, India has become the world’s largest producer and consumer of sugar and the world’s 2nd largest exporter of sugar.

A Record Season

For the India Sugar Sector, this season has turned out to be quite an exceptional one. All records of sugarcane production, sugar production, sugar exports, cane procured, cane dues paid and ethanol production was made during the season.

This sugar season, sugar mills procured sugarcane worth around 1.18 lakh crore and furnished the payment of around 1.12 lakh crore without any subsidy. Thus, the remaining dues stand at ₹6000 crores indicating that 95 percent of all the dues of the current season have already been paid. 

One noteworthy highlight of the season is that India reached the highest exports of 10.98 million tonnes with no financial assistance or subsidy from the government. Supportive international prices and Indian Government Policy led to this feat of the Indian Sugar Industry. A total of US$48.6 billion in foreign currency is earned from Sugar Exports to the country. 

The huge bump in sugar production and exports is a result of synchronous and collaborative efforts of Central and State Governments, farmers, sugar mills, and ethanol distilleries. All this created a very supportive overall ecosystem for business in the country. 

Notably, India was in a state of financial distress in 2018-19 but timely government interventions in the last five years built the sugar sector and led the country to the stage of self-sufficiency.

The Ethanol Factor

The government of India has been encouraging sugar mills to divert sugar (sucrose) for ethanol production. This does two things- first, emboldens a cleaner energy source and allows the sugar mills to make swift profits. This will make their financial conditions better to continue their operations and the sugarcane farmers will get their payment on time. 

The Growth of ethanol as a biofuel sector in the last 5 years has amply supported the sugar sector. The use of sugar in ethanol production has led to better financial positions for sugar mills due to faster payments, reduced working capital requirements, and less blockage of funds due to a limited sugar surplus.

In FY2021-22, the revenue of about $2.88 billion has been made by sugar mills and distilleries from the sale of ethanol. Under the Ethanol Blending with Petrol (EBP) Programme, the production capacity of molasses/sugar-based distilleries has increased to 60.5 billion liters per annum.

In the new season, the diversion of sugar to ethanol is expected to increase from 3.5 million metric tonnes to 5 million metric tonnes which would generate revenue for sugar mills amounting to about US$3 billion.

There is an optimum closing balance of 6 million metric tonnes of sugar which is essential to meet domestic requirements for 2.5 months. The diversion of sugar to ethanol and exports led to the unlocking of the value chain of the whole industry as well as improved financial conditions of sugar mills leading to more optional mills in the ensuing season.

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