Sugar industry expects healthy exports this year

The 2021-22 sugarcane crushing campaign promises to be historic for the sugar industry. With rising sugar prices in domestic and international markets, the industry hopes to see healthy exports without the need for government subsidies.

The central government’s decision to promote ethanol has also proven to be a game-changer for the industry and will help it operate independently of any government aid or subsidy, said Prakash Naiknavare, chief executive of the National Federation of Sugar Mills. cooperatives.

The Union cabinet also raised the purchase price of ethanol by oil marketers on Wednesday, which was a welcome move, Naiknavare said.

Speaking to The Indian Express, he said 34 lakh tonnes of sugar are expected to be diverted for ethanol production this year, compared to 22 lakh tonnes diverted last year.

Naiknavare said ethanol is a fast moving commodity with payment released within 15 days. “Sugar prices are not static, while ethanol prices are fixed. The factories don’t have to make any special efforts to sell it, and the last drop is taken by the oil marketing companies, ”he said.

At present, the country’s installed capacity for ethanol production is 456 crore liters, with Naiknavare saying he expects India to reach 10% fuel blend by the end of this season. “Once we reach a 20% blend by 2024-25, 60 lakh tonnes of sugar will definitely be diverted for the production of the fuel additive. It will be a turning point for the industry… ”he declared.

But the cooperative factories have failed to raise funds to expand or start green field production facilities. In 2014, the government announced an interest subsidy scheme for the creation of ethanol production units. To date, banks have disbursed funds to 52 factories, 15 of which are in the cooperative sector. “We have raised the issue with the Ministry of Finance as well as with the new Ministry of Cooperation,” Naiknavare said.

He said the country will see a production of 315 lakh tonnes of sugar, with 34 lakh tonnes diverted for ethanol this season. Given the upward trend in sugar prices, the industry hopes to export 50 lakh tonnes of sugar during the season. “We have lost important markets in Afghanistan and Sri Lanka, but we hope to enter new markets,” Naiknavare said.

However, nearly Rs 1,500 crore in subsidies has not yet been released by the government for export and the creation of buffer stocks.

Rachel J. Bradford