More Stories

Informist, Wednesday, Jan. 22, 2025

 

Please click here to read all liners published on this story

--ISMA official: Mills have ample time to export 1 mln tn of sugar by Sep
--CONTEXT: ISMA Director General Deepak Ballani's comments in an interview
--ISMA official: Govt may OK 1 mln tn more sugar exports on better crop view
--ISMA official: Sugar exports in 2025-26 seen higher on hopes of good crop
--ISMA official: All feedstocks important for ethanol blending programme
--ISMA official: Sugar diversion for ethanol unlikely over 4 mln tn this year

 

By Afra Abubacker

 

NEW DELHI – In the coming eight months, India will have better price points and ample opportunities to export sugar, Deepak Ballani, director general of The Indian Sugar & Bio-energy Manufacturers Association, told Informist. On Monday, the government lifted the ban on sugar exports and allowed mills to ship 1 million tonnes of sugar by the end of September. ISMA has requested the government to allow another 1 million tonnes of exports in the 2024-25 (Oct-Sep) season, Ballani said.

 

"In fact, we had requested 10 lakh (1 million) tonnes (exports) be given immediately. And after more assessment, 10 lakh (1 million) tonnes could subsequently be given," Ballani said in an interview on Tuesday. The government had banned sugar exports in June 2022 due to concerns about lower production. India is the second-largest sugar producer, after Brazil. In 2021-22, India exported a record 11 million tonnes of sugar, worth INR 400 billion.

 

Asked if exports are viable at current global rates, Ballani said that prices will correct upwards. "The sudden depression of international market prices is temporary. We still have an eight-month window to export. We will have enough opportunity to sell sugar in the international market." Global sugar prices fell to a three-year low on Europe's Intercontinental Exchange on Monday after the Indian government lifted the ban. Wednesday, the price fell further to $464.40 per tonne.

 

India is a "strong player" in the global sugar market, Ballani said, adding that India will likely export more sugar next year on hopes of a "very good crop in 2025-26 (Oct-Sep)."

 

Asked if exports will impact domestic prices, Ballani said prices will be in check as there are enough stocks left in the country from last year. "We have a healthy sugar balance. We opened with a very good stock of 80 lakh (8 million) tonnes and reasonably okay production (in 2024-25)," he said.

 

However, as per ISMA's first advance estimate, sugar production in 2024-25 (Oct-Sep) is seen lower at 29.3 million tonnes, from 32.0 million tonnes a year ago. India consumes 28-29 million tonnes of sugar annually. After assessing sugarcane crop conditions, major trade bodies will announce their sugar output estimates by the end of January.

 

ETHANOL

On sugar diversion for ethanol, Ballani said, "Our ethanol programme is almost maxed out at 40 lakh (4 million) tonnes." In the ethanol supply year 2024-25 (Nov-Oct), India will source more ethanol from grains than sugarcane-based feedstocks for blending the biofuel with petrol. "The government has to look at various combinations (of feedstocks) because ultimately we have to achieve the 20% blending (by 2025-26)," Ballani said. Oil companies purchase ethanol from distilleries to blend the biofuel with petrol and achieve blending targets.

 

To encourage production of ethanol from subsidised rice supplied by Food Corp. of India, the government last week reduced the price to INR 22.50 per kg from INR 28.00 per kg. The government cut price of rice from Food Corp. of India amid piling stocks at government godowns. Rice stocks with Food Corp. of India were at 29.1 million tonnes as of Jan. 1, the highest in a decade for the month. Rice had piled up in government godowns as it banned exports in July 2023, which was later reversed in September 2024.

 

Share prices of alcohol companies jumped up after the government cut the price of rice. "...the next cycle (of ethanol tender) will be around 110 crore (1.1 billion) litres and the majority of this would be rice (based). So I think every feedstock is relevant. Having said that, sugarcane has always been a traditionally very reliable source of ethanol," Ballani said. The supply default rates of grain-based distilleries are typically higher than the sugar sector, he added.

 

So far, state oil marketing companies have floated two ethanol supply tenders and grain-based distilleries have bagged most orders. Of the orders for 9.30 billion litres of ethanol, grain-based units will supply nearly 64%, and sugar-based distillers 36.3%. Asked why oil companies have given more orders for grain-based ethanol, Ballani said that most of the dedicated ethanol plants are run on grain-based feedstocks.

 

Dedicated plants are prioritised while allocating supply orders as they have a valid long-term off-take agreement with the oil companies, Ballani said. Unlike sugar mills, dedicated ethanol plants primarily make ethanol. Sugar mills make ethanol from by-products of sugar--cane juice and molasses.

 

To ensure uninterrupted supplies of feedstocks, distillers are opting for grain-based feedstocks--damaged food grains, rice from Food Corp. of India, and maize. The government is also considering increasing the grain-feedstock basket with sorghum and bajra to make ethanol.

 

On expectations from Union Budget 2025-26 (Apr-Mar), Ballani said, "GST (goods and services tax) rate rationalization on flexi fuels to 5%." The sugar industry has been urging the government to reduce goods and services tax on hybrid and flex-fuel vehicles to 5% from 28%. While hybrid vehicles run on regular petrol engines and batteries, flex-fuel is powered by gasoline or ethanol blends.  End

 

Edited by Ashish Shirke

 

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

 

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.

 

Informist Media Tel +91 (11) 4220-1000

Send comments to feedback@informistmedia.com

 

© Informist Media Pvt. Ltd. 2025. All rights reserved.