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Government's Stance on Sugar Exports Amidst Industry Demands


Published Date: May 15, 2024
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Are you looking to Export Sugar in Bulk? In the middle of a challenging year marked by drought, the Indian sugar industry is probably at crossroads, with conflicting interests between the government's prioritisation of the ethanol blending program and the industry's keen interest for sugar exports. 

If you are a sugar exporter, then this article is definitely for you. It will dive into the intricacies of this debate and understand why the government's stance is currently not aligning with industry demands. So, let us get started. 

Industry Optimism vs. Government Priorities

IIndian Sugar Mills’ Association (ISMA) is optimistic about India's sugar surplus and is projecting a net production of 320 lakh tonnes. The figure will surpass domestic consumption estimates and could be a positive sign for sugar exporters.  This optimism comes from the favourable weather and increased Fair and Remunerative Price (FRP) for sugarcane and promising a robust closing stock for the industry.

However, the central government, represented by Sanjeev Chopra, secretary of the Department of Food and Public Distribution, maintains a steadfast commitment to the ethanol blending program. This program, aimed at reducing dependency on fossil fuels, takes precedence over sugar exports in the government's agenda.

The Ethanol Blending Program: A Government Priority

Despite potential surplus sugar, the government is hesitant to allow export sugar in bulk. This is because of fear of depletion of its inventory crucial for sustaining the ethanol blending program. With a sharp eye on future seasons, the government aims to boost its sugar reserves to facilitate increased diversion of sugarcane for ethanol production.

Navigating Surprises and Price Volatility

The ongoing sugar season of 2023-24 has been fraught with surprises, with sugar production exceeding initial projections. To avoid scarcity, the government reduced ethanol diversion, yet retail sugar prices increased, burdening consumers. This price volatility underscores the delicate balance between supply and demand in the sugar market.

Forecasting the Future

Looking at the upcoming sugar season from 2024 to 2025, ISMA (Indian Sugar Mills Association) expects that there will be a decent amount of sugarcane being crushed because the government's Fair and Remunerative Price (FRP) has gone up and the weather forecasts for the rainy season are good. But there are problems on the horizon, especially in places like Maharashtra and Karnataka, where there hasn't been enough rain and it's affecting how much sugarcane farmers can grow, which might lead to less sugar being produced.

Conclusion:

The Indian sugar industry is dealing with different interests. While the sugar exporters want to export more to use up the extra sugar, the government wants to focus on blending ethanol into fuel. Finding a balance between these is crucial for both the sugar industry and the country's energy plans.

If you want to export or Import Agro Commodities in Bulk, Tradologie.com is the best B2B platform. It facialites the bulk transactions without any middlemen through its state-of-the-art SaaS platform. Visit www.tradologie.com to explore B2B export opportunities and stay updated with the latest trends in the industry. 

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