Niti Aayog Report: India’s sugar production set to outstrip demand, paving the way for sustained exports and ethanol diversion
The Government’s policy think tank, NITI Aayog formed a Working Group on Crop Husbandry, Agriculture Inputs, Demand and Supply to analyse the demand and supply trends of various food commodities up to 2047. The group focused on major items and changing consumer preferences, estimating normative requirements and feasible export levels for key commodities.The Group in its report said that there is an increasing trend in the total household expenditure, but the share of food expenditure in it has declined considerably, from 69% in 1972-73 to 44% in 2011-12, and the decline is observed across all expenditure classes and in rural as well as urban areas. The household demand for edible oils has increased significantly. Refined oil is emerging as the most consumed edible oil substituting groundnut oil and Vanaspati ghee. Conversely, there’s a marginal decline in the demand for sugar and its products.
India is self-sufficient in sugar, with improvements in sugarcane yield and recovery rate. Despite a slight decline in sugarcane area, by 2047-48, demand for sugar and its derivative products is estimated at 44-45 million tonnes. Sugarcane production has quadrupled since 1966-67, and though the area remained stagnant, yield increased.
Sugarcane production has increased four-fold, from 93 million tonnes in 1966-67 to 371 million tonnes in 2019-20 at annual growth of 2.48%. The area under sugarcane increased from 2.3 million hectares in 1966-67 to 5.1 million hectares in 2006-07 but has remained stagnant thereafter.
The report notes a desirable stagnation in sugarcane area for water conservation. By 2047-48, sugarcane yield is projected to increase to 100,000 kg/ha, with a sugar recovery rate of 11.15%. Using the projected production of sugarcane and sugar recovery rate, the total production of sugar and sugar products is likely to increase to reach 50 million tonnes in 2047-48.
The direct demand for sugar is predicted to grow slowly due to increased health consciousness. Growth in direct demand for sugar and products is expected to be 18-19 million tonnes with different income scenarios. Overall demand for sugar and its products is projected at 39-40 million tonnes in 2030-31 and 44-45 million tonnes in 2047-48.
On production forecast, the report said that the production of sugar and its products is expected to remain higher than their demand throughout, leaving a surplus of 3 million tonnes in 2030-31 and 6 million tonnes in 2047-48, which can be exported, and used for ethanol production for blending with diesel and petrol.
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