Ethanol To Keep Indian Mills On Sugar High, Says Shree Renuka’s Atul Chaturvedi
Sugar prices in the global market have been rising in recent months, reaching multi-year highs. However, the Indian domestic market does not mirror the international price scenario, according to Atul Chaturvedi of Shree Renuka Sugars Ltd. Brazil is the world’s largest sugar producer and the raw sugar price leader, presently producing over 600 million tonne of cane, Chaturvedi, executive chairman of Shree Renuka Sugars, told BQ Prime.
But its production is experiencing logistical difficulties—the rains have placed a strain on the country’s shipping route, causing white sugar prices to rise, he said. In London as well, sugar prices have risen to nearly $700.
In comparison, the Indian sugar market has had a minimal reaction to the worldwide trend. Domestic sugar prices have risen by only Rs 2 per kilo, or Rs 2,000 per tonne. The El Niño effect with reduction in rainfall and the summer months are also factors that have prevented a surge in prices, he said.
Impact Of Delayed Monsoon
India is a sugar-surplus country, said Chaturvedi. This year, India’s sugar production is expected to be about 32.75-32.8 million tonne, while domestic consumption is expected to be 27.4 million tonne, he said.
According to him, 4.5 million tonne of sugar will be diverted to ethanol blending this year. As a result, any hiccup in production owing to weather conditions will have little impact on the domestic sugar market, he said.
The government has already capped local pricing, and exports to 6.1 million tonne this year. It is expected to do the same next year as well, Chaturvedi said.
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