Government assures sugar industry to look at demand related to export, MSP and ethanol rate

Food Secretary Sudhanshu Pandey assured the sugar industry on Wednesday that the government would consider its request for export quotas, minimum selling price and ethanol rates for the next marketing year.

At a conference, Indian Sugar Mills Association (ISMA) Chairman Aditya Jhunjhunwala demanded that the export quota for the 2022-23 marketing year (October-September) be announced at the earliest because the country would have a surplus of 8 million tons of sweetener.

That aside, he demanded that the minimum selling price (MSP) – the rate below which factories cannot sell sugar – be increased to 35-36 rupees per kg from 31 rupees per kg and also demanded an increase in the price of ethanol.

Also read: Government to soon announce sugar export quota for 2022-23 marketing year: Food Secretary

Mr Pandey said the sugar sector “is now smiling” as it has performed very well in recent years in the production, export and supply of ethanol thanks to the government’s supportive policy.

However, he said the smile must now be passed on to consumers.

Responding to the industry request, Pandey said, “On the government side, there are many areas that we are still trying to address. Some of the challenges that arise, we are aware of these challenges. All of the 5-6 points you have raised, the government is working on all of these points and we will address each of them after interacting with you. On the sidelines of the event, Mr Pandey said the government would “very soon” announce a sugar export quota for the next marketing year starting in October.

In May, the government had imposed restrictions on the export of sugar above 10 million tons, but then authorized an additional 1.2 million tons of shipments, bringing the total to 11.2 million tons for the 2021-22 marketing year.

India’s sugar exports amounted to 7 million tonnes in the 2020-21 marketing year, 5.9 million tonnes in 2019-20 and 3.8 million tonnes in 2018-19 .

Also Read: India set to allow 5m tonnes of sugar exports in first tranche

Jhunjhunwala said sugar production after sugar diversion for 2022-23 is estimated at 35.5 million tonnes while domestic demand is 27.5 million tonnes.

“We can export 8 million tons of sugar in the 2022-23 marketing year. We have urged the government to announce the export quotas and overall policy at the earliest,” the ISMA Chairman said.

The export window is only until March, after which sugar from Brazil will enter the world market, Jhunjhunwala said.

The President of the Indian Sugar Mills Association (ISMA) had written a letter to the Minister of Food and Consumer Affairs, Piyush Goyal, in this regard.

According to a preliminary estimate, ISMA said net sugar production, excluding the diversion of sugar for ethanol production, is expected to increase to around 40 million tonnes in 2022-23, from 39.4 million. tonnes for the current marketing campaign.

However, 4.5 million tons of sugar are expected to be diverted to ethanol in the 2022-23 marketing year, compared to 3.5 million tons in the current marketing year. ISMA said exports of surplus sugar would help maintain domestic sugar prices, which in turn would increase the liquidity position of mills, allowing them to pay cane growers on time.

Rachel J. Bradford