Ethanol policy need to be announced by August 15 in order to prepare sugar mills for required ethanol production and supply in time: WISMA
In a joint meeting of West Indian Sugar Mills Association (WISMA) and Indian Sugar and Bio Energy Manufacturers Association (ISMA) on July 16, 2024, industry leaders discussed challenges facing Maharashtra’s sugar industry. The state, leading in national sugar production with 110 lakh tons in 2023-24, faces a projected 10% drop to 100 lakh tons in 2024-25 due to reduced sugarcane acreage.
WISMA urged revising the Minimum Selling Price (MSP) of sugar to align with increased Fair and Remunerative Price (FRP) of sugarcane, now Rs. 3,400 per ton. Ethanol production and export policies were highlighted, emphasizing the need for supportive government measures to ensure industry stability and profitability.
Maharashtra State Sugar Industry burning /sos issues joint meeting of West Indian Sugar Mills Association, Pune and Indian Sugar and Bio Energy Manufactures Association, New Delhi, held on 16th July, 2024 at Sakhar Sankul, Pune. President ISMA- Mr. Prabhakar Rao, Director General-Mr. Deepak Ballani, Director Technical -Mr. Deep Malik, WISMA President- Mr. B. B. Thombare along with Executive Committee Members, Commissioner Sugar Maharashtra Dr. Kunal Khemnar, Maharashtra State Co.op. Sugar Factories Fedn. MD- Mr. Sanjay Khatal and WISMA ED- Mr. Ajit Chougule participated.
Maharashtra State Sugar Industry leads in Sugar production with first rank at National level with 110 Lakh ton during Sugar Season – 2023-24 (Oct. to Sept.) season ended in April- 2024 and Ethanol production and supplies 58 Crore liters till 30/06/2024.
According to the press release by WISMA, the rainy season monsoon have made good impact for agricultural Kharif crops sowing in Maharashtra State has provided some support to Sugarcane crop. Due to last years scanty rainfall and drought level situation, WISMA estimates drop in acreage from last years 14 to 12 Lakh hectares for this sugar season- 2024-25. In Marathwada region Sugarcane area reduction is around 25%, Western Maharashtra region rise by 5% except Solapur district where reduction of about 10%.
Therefore, based on area wise Sugar production as estimated by WISMA would be lower around ten percent, as on situation prevailing on 16th of July 2024, up to 100 Lakh tons nett. (previous season 2023-24 is 110 Lakh tons) These estimates could prove additions depending on monsoon behavior in either way up and down.
As per past practice, ISMA has procured satellite imagery on Pan India basis and it will come out with its preliminary estimates of sugar production for 2024-25 SS by the end of this month July, after considering factors like crop condition, crop types ratio, weather, availability of water and other allied aspects.
Sugar Selling Prices (MSP) – Sugar minimum selling price is notified in sugar season 2018-19 as Rs. 31 per Kg on 14th February 2019. Every year upward revision in raw material sugarcane is substantial. FRP of Sugarcane is increased to Rs. 3,400/- per ton for 2024-25 season. Cost of average Sugar production on pan Indian basis is Rs. 41.66/- per kg based on State wise Sugar production costs. This has been submitted to Government of India.
In view of the above, WISMA demanded that MSP of sugar should be revised and a formula needs to be made to align MSP with FRP of sugar. Sugar mills are incurring cash loss at every kilo of Sugar sale as market rates are at lower side as compared to other processed products.
The Ethanol supplies were severely affected due to Government of India notifications on Ethanol production restrictions promulgated vide 7th and 15th December 2023 on sourcing of Ethanol from the Sugarcane Juice and B heavy molasses routes. The decision has seriously impacted the working days of distilleries and reducing them to 180 days against normal 270 to 330 days. This has created immense financial problems to the sugar mills by way of liquidity getting blocked in unutilized stocks thereby leading to repayment defaults in EMI’s for the loans availed to set-up or expand the Ethanol plants. Upward revision of Ethanol prices is very much crucial in line with the increased FRP of sugarcane and a formula to be made to align ethanol prices with FRP.
“In order to meet Ethanol blending programme for forthcoming SS – 2024-25 Ethanol policy to be announced by 15th of August – 2024 in order to prepare Sugar mills for required Ethanol production and supply in time,” WISMA further added.
WISMA said, “Sugar Export in SS – 2024-25 – Twenty Lakh tons export to be allowed, to avoid pilling of Sugar stocks, which the industry anticipates shall be in the range of 85-90 Lakh tons as against 55 Lakh tons required for 2.5 months.”
Increased Sugarcane Fair and Remunerative Price (FRP) every year, SS-2024-25 is Rs. 3,400/- per ton. This season financial jolt by Ethanol production restrictions of Government of India, lower offtake of monthly Sugar quotas and increased FRP every year created situation for availing loans every season. Therefore, WISMA urged for loans by Sugar Mills needs restructuring along with moratorium of 2 years and EMIs for 10 Years to help them to honor the repayment of all short, medium and long term loans of SDF, NCDC, Co-operative banks and Nationalized banks.
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