India’s sugar exports on good course; contracts over 50 lakh tonnes so far

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11 May 2021, New Delhi, IN:  Indian sugar mills may achieve their target of exporting 6 million tonnes of the sweetener by the end of June, three months before September, when the 2020-21 season ends.  “So far, mills have contracted exports of 5 million tonnes of sugar. Exports are moving well. Last year, we had exported a record over 5.9 million tonnes of sugar. We expect to create a new record this year,” said Subodh Kumar Singh, joint secretary in the food ministry. 

The surge in exports is mainly due to firm global prices and subsidy, which have made the overseas markets lucrative. 
Singh said the government provides a subsidy of ₹5.83 on every kg of sugar exported up to 6 million tonnes. The subsidy amount is transferred directly to the farmers’ accounts.  “So, the more the exports, the more would be the liquidity which can be used to settle cane arrears,” he said. Exports will help mills settle dues they owe sugarcane farmers, which is now coming down progressively from ₹21,200 crore, officials said. A drop in output in Brazil and Thailand, the top sugar-producing countries, is helping India. 

“Production in Brazil is likely to be 30 million tonnes as against 38 million tonnes last year,” said Abinash Verma, director general of the Indian Sugar Mills Association, a trade body. “Similarly, sugar production in Thailand has come down from 12 million tonnes to 7.7 million tonnes, making way for Indian sugar in the global markets.” The government is also encouraging sugar mills to divert excess sugar and sugarcane for the production of ethanol, which is blended with petrol. This is a step towards improving the liquidity position of sugar mills, which are grappling with a cash crunch. 

“We have touched the level of 7.4% ethanol blending with petrol as against the target of 8.5% by the end of November this year. Most of the sugar-producing states along with adjoining states are in the range of 9-10% ethanol blending,” said Singh. “We are encouraging remaining states to scale up blending so that we touch the blending target of 10% by next year.” 

India’s sugar production has risen almost 16% to 29.91 million tonnes in the October-April period from 25.8 million tonnes a year earlier. “Due to Covid-19, domestic consumption has not increased. So industry will have to divert excess sugar to ethanol production to maintain liquidity,” an industry executive said. India’s sugar production is forecast to grow 17% to 33.7 million tonnes in the year ended September 2021, according to the US Department of Agriculture, with Uttar Pradesh the largest producer, followed by Maharashtra and Karnataka. 

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