Sugar Exporters

Maharashtra Sugar Mills Seek Export Policy for Next Season

Maharashtra Sugar Mills Seek Export Policy for Next Season

India, the second largest exporter, and the largest consumer of sugar in the world, in May, decided to cap sugar exports at 10 million tonnes to stabilise market availability and prices. This decision was taken as record exports of sugar triggered fears of price hikes of the commodity in the domestic market. However, there has not been a shortage in sugar reserves. This is evident from the fact that in the last crushing season, India’s 525 sugar mills produced around 40 million tonnes of sugar. 

Prompted by the surplus, WISMA or West Indian Sugar Mills Association, a body constituting all the sugar mills of Maharashtra, has made an appeal to the central government. In the appeal, WISMA urged the government to announce the export policy for the next sugar year starting October 1. WISMA asserted that this will allow sugar millers to sign contracts for Sugar Exports in India. This will also prevent an overflow of reserves as the sugar industry is expecting a record production of sugar this crushing season. 

WISMA also maintains that the international market is favourable for Indian raw sugar and Indian white sugar. Owing to the promise of bumper production, sugar millers are currently making deals with importers overseas beforehand. The sugarcane-crushing operations in 

Maharashtra and some other states would be completed by the end of October. This would aid the overseas supply while ensuring sufficient availability of sugar in the domestic market. 

An Emerging Market for Sugar Industry 

Owing to the shift to sustainable practices by industries and India’s determination to increase the use of biofuels, a massive increase in ethanol production was registered in the last five years. 

Ethanol is produced from sugarcanes and the Indian Sugar Mills Association (ISMA) has estimated that India’s sugar production could likely take a fall to 35.5 million tonnes due to the diversion of sugarcane towards ethanol manufacturing. India’s sugar production has reached 40 million tonnes against the required buffer reserve of 27 million tonnes. The excess 13 million tonnes might get diverted towards the production of ethanol. It is to be noted that 4.5 million tonnes are already being supplied for ethanol production. 

The Government of India (GOI) is rolling out incentives to boost ethanol production. As a result, surplus sugar production can be redirected for the manufacturing of ethanol, allowing it to be used up and more crucially, monetised. Government is thus rightly pushing ethanol production and increasing consumption by increasing the blending percentage of ethanol year on year (YoY). The exports of sugar, however, are likely to stay as planned. 

Conclusion 

India has been restricting the exports of multiple commodities like wheat, rice, etc. It has been done to stabilise the local reserves and prices. India curbed the export of sugar in May

and India is easing the restrictions as the markets have now balanced out. A new market for the sugar industry has also emerged which is Ethanol and it shows promising prospects for the sugar millers.

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