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Informist, Thursday, Dec. 19, 2024

 

 

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--Gadkari: Will help sugar industry in exports, hike in minimum sale price
--CONTEXT: Transport Minister Nitin Gadkari speaking at ISMA AGM 
--ISMA head:Govt must allow 2 mln tn sugar exports to ensure fincl liquidity
--CONTEXT: ISMA President Rao speaking at ISMA AGM  
--ISMA head: Falling sugar prices making cane payments unsustainable
--Food secy: Sugar exports likely only after meeting ethanol requirements 
 

 

NEW DELHI – Transport Minister Nitin Gadkari has assured the sugar industry of a favourable policy support from the government. The minister said he would make recommendations to the government to allow sugar exports and increase the minimum selling price of sugar.

 

"I will try to help to move things to the ministers. And this is the industry which is the most impactful for agriculture," Gadkari said at the Indian Sugar & Bio-energy Manufacturers Association Annual General Meet on Thursday. Citing the rise in fair and remunerative prices of sugarcane, the sugar industry has been demanding the minimum selling price of sugar be hiked to INR 39.14 per kg. The current minimum selling price of the sweetener is INR 31 per kg, which has been unchanged since 2019.

 

ISMA President Prabhakar Rao said that sugar prices are falling in domestic market amid high supply. Sugar prices are lower than last year, but sugarcane costs have increased considerably this year, Rao said. In February, before the General Election, the Centre announced a hike of INR 25 in the fair and remunerative price of sugarcane to INR 340 per 100 kg. For cane purchases, mills have to pay farmers prices decided by the government. "Sugarcane is the only crop with direct market linkage," Rao said. Though the government announces fair prices for cane, it does not procure them from farmers.

 

However, the government tracks cane payments to farmers and defaulting mills are penalised. On cane payments, Rao said falling sugar prices and higher cane prices make timely cane payments financially non-viable. To offload the surplus sugar in the country and improve the financial liquidity of sugar, ISMA urged the government to permit 2 million tonnes of sugar exports. Since 2022, India has banned sugar exports. 

 

ISMA estimates the 2024-25 sugar season (Oct-Sep) to have opened with a carry forward stock of 8.4 million tonnes. The association sees gross sugar production in the year at 33.3 million tonnes. India consumes only 28.5-29.0 million tonnes of sugar. The government has pegged the carry-forward stock at 7.8 million tonnes, and gross sugar production at 32.0 million tonnes. ISMA officials said the government estimates are biased on the lower side as a precaution against crop damage and supply-side challenges. 

 

On the chances of sugar exports, Food Secretary Sanjeev Chopra said that the government will take a call after ensuring there was enough sugar for consumption and ethanol requirements. Sugarcane is an important feedstock for ethanol production. ISMA officials hope the government will review sugar exports in January. 

 

"As we mentioned many times in the past, the order of priority of sugar utilisation--is first ensuring the domestic consumption, the second is the diversion for ethanol, and third is exports," Chopra said. The industry estimates sugar diversion for ethanol making to be 4 million tonnes in 2024-25. 

 

Ethanol demand is promising with Bajaj Auto Ltd. making flex-fuel two-wheelers, Gadkari said. Other companies--Mahindra & Mahindra Ltd., Maruti Suzuki India Ltd., Toyota, and Hyundai India Motor Ltd.--are also developing vehicles that run on E20 or E100 fuels, the minister added. Flex-fuel vehicles run on ethanol-blended petrol, and E20 fuel comprises 20% ethanol blended in petrol.

 

However, he has asked the industry not to keep all the eggs in the biofuel basket. He asked the industry to focus also on potash, bagasse, and bio-plastics. Gadkari said that the government is promoting ethanol production from varied feedstocks--rice, corn, sorghum, bamboo, and agricultural residues to achieve its ambitious ethanol blending targets. 

 

To reduce dependence on crude oil, the government has set a target of achieving 20% blending by 2025-26. India is dispensing E20 fuel in 17,000 retail outlets and E100 in 400 pumps.  End

 

Reported by Afra Abubacker

Edited by Akul Nishant Akhoury

 

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