Sugar manufacturing estimates by a number of businesses point out that there might be a drop. File
| Photo Credit: Reuters
Karnataka, one of many largest sugarcane rising States, is probably going to see a close to 30% decline in sugarcane manufacturing this season due to deficit rains. Its neighbouring State Maharashtra could have a 10-20% drop in cane manufacturing, once more due to erratic rains, in accordance to sugarcane growers’ associations.
However, manufacturing in Uttar Pradesh is alleged to be on observe within the present season (October 2023-September 2024).
Though it’s too early to get a transparent image, sugar manufacturing estimates by a number of businesses point out that there might be a drop.
The Indian Sugar Mills Association (ISMA) stated not too long ago that, in accordance to its preliminary estimates, space underneath sugarcane cultivation this yr is 57 lakh hectares and complete sugar manufacturing might be 33.7 million tonnes within the 2023-24 sugar season. “With India’s domestic consumption average of 278.5 lakh tonnes (27.8 million tonnes), the production estimates assure sufficient sugar for domestic consumption,” it stated.
The manufacturing final season was 36.9 million tonnes and the present yr opened with a 6.5 million inventory. While manufacturing could drop 20% in Karnataka and Maharashtra, manufacturing will enhance almost 8% in Uttar Pradesh, it stated.
Agrimandi.stay Research House has projected a 9.4% drop in complete sugar manufacturing and a 2.9% enhance in sugar consumption within the present yr in contrast with final sugar season.
The OECD-FAO Agricultural Outlook 2023-2032, says that after touching a 16-month low in October 2022, “international sugar prices rebounded sharply later in the year and in early 2023, mainly reflecting prevailing overall tight global sugar supplies amid strong global import demand.” Sugar manufacturing is forecast to decline in India and within the European Union, due to decrease sugar beet plantings and yields, it stated.
Though sugar manufacturing this yr might be lesser than the final two seasons, the supply is enough for home demand, say sugar producers.
Yet, in a season that can see a fall in manufacturing after almost 5 years, the Indian sugar sector is in want of long-term coverage selections that can convey stability to all stakeholders.
India exported 11 million tonnes of sugar within the advertising and marketing season 2021-2022 and 6 million tonnes in 2022-2023. This yr, the federal government has introduced sugar exports underneath restricted class as home prices went up barely. International sugar prices noticed a pointy bounce final yr. In India, the hike was marginal as a result of sugar is a managed commodity, stated Uppal Shah, co-founder and CEO of Agrimandi.
“Sugarcane production is affected in North Karnataka and Maharashtra and this will impact the sugar mills too,” stated one of many sugar producers in Karnataka. “International raw sugar prices are far higher than Indian prices. But the mills cannot export now. The government is yet to announce the ethanol prices for the current season. That is important for the sugar mills,” the sugar producer added.
“While sugar should be affordable to consumers, sugarcane farmers should also get viable prices. At present, the ethanol programme is the main stay for the sugar mills. The current ethanol blend level is 11.5% and it is targeted to touch 20% in 2025-2026. Roughly, four million tonnes is diverted for ethanol production. We need to see what happens this year,” stated one other sugar producer in Tamil Nadu.
In Karnataka, the farmers have demanded a Fair and Remunerative Price (FRP) of ₹4,000 a tonne as the price of cultivation is ₹3,580 a tonne and the present FRP is ₹3,150 a tonne for a primary (sugar) restoration price of 10.25%. Kurubur Santha Kumar, Karnataka president of the Indian Sugarcane Farmers’ Association, says it was not simply the lack of crop, however yield too was affected this yr. Further, the typical sugar restoration price is lower than 10%. So, the federal government ought to cut back the restoration price to 8.5% for south Indian sugarcane farmers and help those that have suffered crop loss due to deficit or unseasonal rains. Farmers will divert to different crops if they don’t get remunerative prices for sugarcane.
Aditya Jhunjhunwala, president of ISMA, stated the precedence areas for the sugar mills are home provide, ethanol manufacturing, and exports. “The domestic prices went up gradually and only slightly,” he stated. Further, the restrictions on exports are usually not possible to have an effect on the mills.
It is the federal government that decides the FRP and the minimal promoting value for sugar. “We are not against higher FRP for farmers. But, the FRP and the MSP should be in tandem. The MSP should also be increased. The government has the inflation data and the ethanol requirements. The ethanol season started this month but there is no clear picture yet on its pricing. We are asking for a long-term ethanol pricing formula so that the mills do not have to wait for the prices every year. The sugar mills have made investments to build capacities and need to repay loans. Ethanol prices will help the mills decide the quantity of sugar to be diverted for ethanol production,” he stated.
