ISMA urges govt to reconsider sugar exports on prediction of upto 36 lakh tons surplus in FY23-24
The Indian Sugar and Bio-Energy Manufacturers Association (ISMA) predicts a 36 lakh ton sugar surplus this season and urges the government to permit exports. This move would enhance financial liquidity for sugar mills and enable timely payments to cane farmers. With an opening stock of 56 lakh tons and domestic consumption forecasted at 285 lakh tons, closing stock by September 2024 will be 91 lakh tons. ISMA emphasizes the benefits of exporting surplus sugar.
The Indian Sugar and Bio-Energy Manufacturers Association (ISMA), the apex body in the sugar and bio-energy industry in the country, has predicted a significant sugar surplus of upto 36 lakh tons for the current season. In light of this, ISMA has urged the government to re-consider permitting the export of surplus surge after due consideration of domestic demand and supply. “This will boost the financial liquidity of sugar mills and enable timely payments to cane farmers. ISMA believes that allowing exports will contribute to the smooth functioning of the sugar industry and foster economic stability,” the apex body said in a statement.
According to the experts, the opening stock of approximately 56 lakh tons in October 2023 in addition to forecasted domestic consumption of nearly 285 lakh ton for the season, will result in significantly higher closing stock of 91 lakh ton by the end of September 2024. This estimated surplus, amounting to 36 lakh tons above the normative stock of 55 lakh tons, can potentially lead to additional costs for the millers on account of idle inventory and carrying costs, said ISMA. “In light of these projections, it is clear that the domestic consumption and availability situation is more than comfortable; the EBP can be very well managed within the sugarcane production and that the surplus sugar left thereafter because of the sudden pause of ethanol blending from sugarcane and sugar syrup, is in excess and cannot be converted back to Ethanol,” ISMA said. “In light of these projections, it is clear that the domestic consumption and availability situation is more than comfortable; the EBP can be very well managed within the sugarcane production and that the surplus sugar left thereafter because of the sudden pause of ethanol blending from sugarcane and sugar syrup, is in excess and cannot be converted back to Ethanol,” ISMA said.
Per ISMA, allowing the exports will be a win-win situation for all stakeholders, including farmers. Deepak Ballani, Director General of the Indian Sugar and Bio-Energy Manufacturers Association (ISMA), said, “We at ISMA share the government’s policy objectives for ensuring betterment of sugarcane farmers and the sustained growth of the sugar industry in India ensuring stability in the sugar sector. We are constantly working with the government to find ways for economic wellbeing of the farming community and implement workable solutions to utilise the surplus generated this season. Allowing exports would not only ensure a comfortable stock for domestic consumption and sustain the Ethanol Blending Program (EBP) but also contribute to maintaining the financial liquidity of sugar mills, enabling timely payments to farmers.”
Impact of FRP
Government has increased the Fair and Remunerative Price (FRP) of sugarcane for 2024-25 SS by Rs 25 per quintal to Rs 340 per quintal. This increase in FRP, ISMA said, will directly increase cane cost and thereby cost of production of sugar. It will also act as an additional burden to the already financially stressed mills as mills are mandated to pay the cane price payment within 14 days of supply of cane.
Earlier in March, the National Federation of Cooperative Sugar Factories Ltd (NFCSF) had urged the government to allow the diversion of surplus sugar towards ethanol production. They had highlighted that sugar mills are facing a financial crisis due to sudden restrictions imposed by the Centre on ethanol production.
In December, the government had banned sugar mills and distilleries from using sugarcane juice or sugar syrup for ethanol production with immediate effect to ensure adequate availability of sugar for domestic consumption.
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