India may consider allowing sugar export after December, to prioritise ethanol for now
Sugar mills hoping for export permissions next season may face disappointment, as the government has no plans to lift the export ban until at least December 2024. Despite an expected sugar surplus, officials remain cautious due to potential crop damage from heavy rains. While ethanol production has been allowed, the government’s priority is ensuring domestic supply stability before considering exports.
Sugar mills, which are expecting a positive decision on their demand to permit export of some quantity of sugar next season (October-September), may be disappointed. There is no such plan by the government until at least December, 2024, official sources said. The government in October 2023 issued a notification, restricting sugar export for an indefinite period, but the policy allowed shipments with prior permission from the Food Ministry.
The ministry expects that the opening stock in 2024-25 season may be 90 lakh tonnes (lt), which is 25 lt more than domestic sugar requirement for two and a half months. “Even if the overall production falls by 10 lt (to 310 lt), the next season’s exportable surplus (over and above buffer requirement) will still be higher than 15 lt,” an official source said.
However, the government is also aware of possibilities of damage to sugarcane crop due to heavy rains and floods, which was the case two years back in Bihar and eastern Uttar Pradesh, an official said, adding “unless such a probability is completely ruled out, which can happen only after December, it is difficult to take a chance”. The policy cannot be like allowing sugar export now and import after five months, officials said justifying the cautious approach.
Indian Sugar and Bio-Energy Manufacturers Association (ISMA) in July had urged the Centre to permit export of sugar as opening stock is estimated at 91 lt for 2024-25 season, after due consideration of domestic demand and supply as such a step would enhance liquidity of sugar mills and enable timely payments to cane farmers.
Output assessment
The Food Minister Pralhad Joshi had earlier said that any decision on sugar export would be taken based on the assessment of next season’s production. Sugarcane sowing has already been completed and the first estimate of production of sugarcane is likely to be released in the last week of September, following which the sugar production estimate for 2024-25 season will also be released.
ISMA, the association of private sugar mills, has predicted a significant sugar surplus of up to 36 lt for the current season. It said that the opening stock of sugar was 56 lt as on October 1, 2023 and with an estimated production of about 321 lt in 2023-24 season, the opening stock as on October 1 this year may be about 91 lt after factoring the surplus.
Highlighting that the domestic consumption of sugar in current season seen at about 28.5 mt, ISMA said it will result in significantly higher surplus. This estimated surplus can potentially lead to additional costs for the millers on account of idle inventory and carrying costs, it said.
The government in last week of August, allowed sugar mills with distilleries to manufacture ethanol directly from sugarcane as well as B Heavy molasses, lifting the previous ban imposed in December 2023. However, the Food Ministry will periodically review the diversion.
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