The Indian sugar industry is one of the most important agro-based industries in the world. It not only generates Sugar for domestic and international consumption but is also crucial for the livelihood of the rural sector of India. Around 50 million sugarcane farmers as well as 5 lakh workers are dependent on the sugar industry of India for employment. India is not just the largest producer but it is also the major consumer and exporter of sugar worldwide. Thus, it is essential for the sugar industry to generate high revenue for the benefit of farmers and workers associated with the sugar industry.
Uttar Pradesh, Maharashtra, Karnataka, Tamil Nadu, Haryana, Gujarat and Bihar are the major sugarcane producing states in India. According to the Indian Sugar Mills Association (ISMA), the domestic sugar production is anticipated to be 340 lakh tonnes in the sugar season from October-September 2022-23, whereas the sugar production in the previous sugar season 2021-22 was 358 lakh tonnes out of which 45 lakh tonnes sugar i.e. the highest ever quantity of sugar was diverted for ethanol production up by 41% year-on-year.
Revenue Report Of Sugar Industry 2022-23
According to CareEdge Ratings, Indian sugar businesses’ revenues would likely climb 8-12% in FY23, owing to an increase in installed capacity as well as an increase in ethanol blending target and selling price.
With respect to the data of sugar diversion towards ethanol production, as per the report, “the rising diversion towards high realisation ethanol is projected to enable 8-12% revenue increase for sugar mills this fiscal year. The government plans to shift around 60 lakh tonnes of surplus sugar to ethanol yearly by 2025.”
The director of CareEdge Advisory & Research, Mr. Tanvi Shah said that the revenue or the output for sugar mills is anticipated to rise by 8-12% in fiscal year 2023, based on study of leading operators accounting for around 50% of the organized sugar sector. “Increased installed capacity for sugar production and distilleries, as well as a rise in ethanol blending goal and pricing, are projected to promote development.”
She also added that, with the assistance of the Government’s ongoing help for the Indian sugar industry as well as increased emphasis on ethanol production to bolster the Ethanol Blending Program in India, the sugar industry is projected to acquire momentum in the future.
Sugar Production Data 2022-23
Sugar output was up 5.5% YoY as of February 15, 2023. In accordance with the report, the sugar export capacity for this sugar season has been fixed at 60 lakh tonne, which is lower than the 72 lakh tonne and 112 lakh tonne shipped in 2020-21 and Sugar season 2021-22, respectively. Further Sugar Export quotas will be determined when a demand-supply scenario is analyzed.
According to the announcement by the GOI, the Goods and Services Tax was lowered from 18% to 5% in association with any additional sugar export quota that could help to upgrade the performance of the sugar mills in the near future. As it is known that ethanol is also generated from molasses. So, as per the record, the price of ethanol obtained from C heavy molasses is expected to increase by 6% i.e. priced at Rs. 49.41 per liter. Besides that, ethanol extracted from direct route i.e. from sugar/sugar syrup/sugarcane juice as well as B heavy molasses route to be raised by 3% priced up at Rs 65.61per litre and Rs 60.73 per litre respectively, that will in turn, encourage sugar mills to generate significant ethanol and boost their profitability.
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