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Sugarcane agric THMB Agri boost: Sugarcane worth Rs 91,000 crore purchased in 2020-21

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SME Times News Bureau | 21 Aug, 2021
Against the export target of 60 lakh metric tonnes (LMT), contracts of about 70 LMT have been signed and more than 60 LMT sugar has been lifted from the sugar mills as on August 16, the government said on Thursday.

Also, a record value of sugarcane worth nearly Rs 91,000 crore has been purchased by sugar mills in 2020-21 to facilitate export of surplus sugar and diversion of sugar to ethanol to ensure timely payment of cane dues, said a release issued by the Ministry of Consumer Affairs, Food and Public Distribution.

In the past few years, sugar production in the country has been more than the domestic consumption. The Central government has been encouraging sugar mills to divert surplus sugar to ethanol and has been providing financial assistance to the sugar mills to facilitate export of sugar, thereby improving their liquidity, and enabling timely payment of cane price dues to the farmers.

In the last three sugar seasons -- 2017-18, 2018-19 and 2019-20 -- about 6.2 LMT, 38 LMT and 59.60 LMT of sugar has been exported, respectively.

In the current sugar season 2020-21 (Oct-Sept), the government is providing assistance of Rs 6,000/MT to facilitate export of 60 LMT of sugar.

Against the export target of 60 LMT, contracts of about 70 LMT have been signed, more than 60 LMT has been lifted from the sugar mills and over 55 LMT has been physically exported from country as on August 16, 2021.

Some sugar mills have also signed forward contracts for export in the ensuing sugar season 2021-22. Export of sugar has helped in maintaining demand-supply balance and stabilising domestic ex-mill prices of sugar.

In order to find a permanent solution to deal with the problem of excess sugar, the government is encouraging sugar mills to divert excess sugarcane to ethanol, which, in turn, is blended with petrol.

It not only serves as a green fuel but also saves foreign exchange on account of crude oil import; revenues generated from sale of ethanol by mills also help the sugar mills clear cane price dues of the farmers.

In the last two sugar seasons -- 2018-19 and 2019-20 -- about 3.37 LMT and 9.26 LMT of sugar has been diverted to ethanol, respectively. In the current sugar season, more than 20 LMT is likely to be diverted.

In the ensuing sugar season (2021-22), about 35 LMT of sugar is estimated to be diverted; and by 2024-25, about 60 LMT of sugar is targeted to be diverted to ethanol, which would address the problem of excess sugarcane/sugar as well as delayed payment issue because the farmers would get paid immediately.

However, as the adequate ethanol distillation capacities would be added only by 2024-25, export of sugar will continue for another 2-3 years.

In the past three sugar seasons, about Rs 22,000 crore revenue was generated by sugar mills/distilleries from the sale of ethanol to the oil marketing companies (OMCs).

In the current sugar season, about Rs 15,000 crore revenue is being generated by sugar mills from sale of ethanol to OMCs, which has helped sugarcane mills make timely payment of cane dues to the farmers.

In the previous sugar season of 2019-20, about Rs 75,845 crore cane dues were payable, out of which Rs 75,703 crore has been paid and only Rs 142 crore arrears are pending.

In the current sugar season of 2020-21, sugarcane worth about Rs 90,872 crore has been purchased by the sugar mills, which is a record, against which about Rs 81,963 crore cane dues have already been paid to the farmers, the ministry release said.
 
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