IANS | 08 Mar, 2023
In
Sugar Season (Oct-Sep) 2022-23, India is expected to produce 336 LMT
sugar with diversion of about 50 LMT for ethanol production. Thus, total
sucrose production in the country would be 386 LMT. This is a little
less than last year sucrose production of 395 LMT (359 LMT sugar + 36
LMT for ethanol production) but second highest in last 5 years.
As far
as sugar production scenario is concerned, Maharashtra and Karnataka
have got less sugar production this season due to reduced yield which
can be attributed to ratoon crop as well as untimely rains during
Sep-Oct 2022. However, some states like Tamil Nadu has higher production
than last year. So overall, sucrose production is expected to be less
by about 3% from last season 2021-22.
Keeping
in view the domestic consumption of about 275 LMT sugar and exports of
about 61 LMT, there is expected to be closing balance of about 70 LMT
sugar which is sufficient to meet domestic demand for about 3 months.
Therefore, sufficient sugar is available for domestic consumers at
reasonable prices throughout the year.
It
is remarkable that when international prices of sugar are at record
high and are showing no signs of decline, domestic prices have been kept
stable with little increase as a result of pragmatic government policy
interventions.
Domestic ex-mill prices of sugar are stable and in the
range of ₹ 32-35/kg. The average retail price of sugar in the country is
about ₹ 41.50/ kg & is likely to remain in the range of ₹ 37-43/kg
in coming months which is not a cause of worry. It is outcome of
Government policies that sugar is not ‘bitter’ in the country and still
sweet.
Interestingly,
with diversion of sugar towards ethanol production and exports of
sugar, financial position of many sugar mills have strengthened and as a
result, cane dues to farmers have been paid in time. During SS 2021-22,
sugar mills procured sugarcane worth more than ₹ 1.18 lakh crore and
released payment of more than 1.17 lakh crore for the season with no
financial assistance (subsidy) from Government of India.
Thus, cane dues
for sugar season 2021-22 are less than ₹ 500 crore indicating that
99.7% of cane dues have already been cleared for SS 2021-22 and 99.9%
dues of earlier seasons have already been paid which in itself is a
record.
As
a long-term measure to enable sugar sector to grow as self-sufficient,
the Central Government has been encouraging sugar mills to divert sugar
to ethanol and also to export surplus sugar so that sugar mills may make
payment of cane dues to farmers in time and also mills may have better
financial conditions to continue their operations. With success in both
the measures, Sugar sector is now self-sufficient with no subsidy for
the sector since SS 2021-22.
Growth
of ethanol as biofuel sector in last 5 years has amply supported the
sugar sector as diversion of sugar to ethanol has led to better
financial positions of sugar mills due to faster payments, reduced
working capital requirements and less blockage of funds due to less
surplus sugar with mills. During 2021-22, revenue of more than ₹ 20,000
crore has been made by sugar mills/distilleries from sale of ethanol
which has also played its role in early clearance of cane dues of
farmers.
Ethanol production capacity of molasses/sugar-based
distilleries has increased to 700 crore litres per annum and the
progress is still continuing to meet targets of 20% blending by 2025
under Ethanol Blending with Petrol (EBP) Programme. In new season, the
diversion of sugar to ethanol is expected to increase from 36 LMT to 50
LMT which would generate revenue for sugar mills amounting to about ₹
25,000 crores.
The Ethanol Blending Programme has saved foreign exchange
as well as strengthen energy security of the country. By 2025, it is
targeted to divert more than 60 LMT of excess sugar to ethanol, which
would solve the problem of high inventories of sugar, improve liquidity
of mills thereby help in timely payment of cane dues of farmers and will
also generate employment opportunities in rural areas.
To
achieve blending targets, Government is encouraging sugar mills and
distilleries to enhance their distillation capacities for which
Government is facilitating them to avail loans from banks for which
interest subvention @ 6% or 50% of the interest charged by the banks
whichever is lower is being borne by Government.
This will bring an
investment of about ₹ 41,000 crore. In past 4 years, loans of about
₹20,343 crore have been sanctioned to 243 project proponents out of
which loans of about ₹ 11,093 cr have been disbursed to 210 project
proponents.
Sympony
of Government policies, State Government and Sugar mills have led to
promotion of interest of farmers, consumers as well as workers in sugar
sector affecting livelihood of more than 5 crore persons directly and
all the residents of the country indirectly by making sugar afforable
for one and all.