Sunday, 13 Oct, 2024
By: Yash Gupte
There has been a record increase in the season wise exports of sugar. Image Source: IANS
According to experts, though the country has emerged as the second largest exporter of sugar, the exports are expected to decline by 28.57% in FY 2022-23 due to the higher diversion of sugar for the production of ethanol.
India has emerged as the world’s largest producer and consumer and the second largest exporter of Sugar. India has overtaken Brazil to become the largest producer of sugar in the world. A record amount of sugarcane, more than 5000 Lakh Metric Tons (LMT) was produced in the country during the sugar season (Oct. to Sep.) 2021–22, of which around 3574 LMT was crushed by sugar mills to make about 394 LMT of sugar (Sucrose). Out of this, 359 LMT of sugar was produced by sugar mills, while 35 LMT of sugar was diverted to the manufacturing of ethanol. As a result, India has surpassed all other countries to become the world's largest producer, consumer, and 2nd largest exporter of sweetener.
According to the Ministry of Consumer Affairs, Food and Public Distribution, “Sugar exports also rose to 109.8 LMT. In sugar seasons 2017-18, 2018-19 & 2019-20, only about 6.2 LMT, 38 LMT & 59.60 LMT of sugar was exported. Supportive international prices and Indian Government Policy led to this feat of Indian Sugar Industry. These exports earned foreign currency of about Rs. 40,000 crore for the country.” One of the reason behind India becoming the largest consumer of the sugar in the world is the imposition of a cap by the government on export of the commodity as it put a cap of 100 LMT on the export from June 1. As the accompanying chart shows, in spite of imposing cap on exports of sugar, India witnessed a record hike in the export of commodity over the years.
Source: Ministry of Consumer Affairs, Food & Public Distribution
There has been a record increase in the season wise exports of sugar. In 2018-19, 38 LMT of sugar was exported from India. The sugar exports increased about two times from 2018-19 to 2020-21 as the latter recorded 70 LMT of sugar exports. The sugar season in India starts from October to September. The cane crushing season generally starts in October-November and continues till mid-April. According to experts, though the country has emerged as the second largest exporter of sugar, the exports are expected to decline by 28.57% in FY 2022-23 due to the higher diversion of sugar for the production of ethanol.
Source: Ministry of Consumer Affairs, Food & Public Distribution
The chart above shows that there has been an increasing diversion of sugar for the production of ethanol in India. From 9 LMT of sugar in 2019-20 to 35 LMT in 2021-22, the diversion of sugar for producing ethanol has increased more than four times in just two years.
Ethanol has been playing a very important role in rising production of sugar in the country. In order for sugar mills to pay cane dues to farmers on schedule and to be in a better financial position to continue their operations, the government has been encouraging mills to divert sugar to ethanol production and to export excess sugar. The sugar industry has been greatly benefited by the growth of ethanol as a biofuel over the past five years since sugar's use in ethanol has improved sugar mills' financial standing through quicker payments, lower working capital needs, and less blockage of funds due to less surplus sugar with mills. The capacity of molasses/sugar-based distilleries to produce ethanol has expanded to 605 crore liters annually, and progress is still being made toward the Ethanol Blending Programme’s (EBP) aim of 20% blending by 2025. The ministry further added that in the new sugar season, the diversion of sugar for the production of ethanol is expected to increase from 35 LMT to 50 LMT which would generate revenue for sugar mills amounting to about ₹ 25,000 crore.
