India, the world's largest sugar consumer and second-largest producer, anticipates a rise in sugar production in the upcoming season (October-September). Union Food Minister Pralhad Joshi, during a global conference in New Delhi, indicated that while better cane production is expected compared to last year, the decision to allow sugar exports will depend on the distribution and adequacy of monsoon rainfall. The Indian Meteorological Department (IMD) has predicted an above-normal monsoon, which plays a critical role in determining the agricultural output.

Government's Stance on Sugar Export

Minister Joshi emphasised that the government is currently not planning to permit sugar exports this season, as they are closely monitoring the monsoon's progress. The Indian Sugar & Bio-energy Manufacturers Association (ISMA) estimates that sugar production for the current season, ending September 30, may reach approximately 32 million tonnes. Although there is no outright ban on sugar exports, the government has only allowed limited quantities for diplomatic purposes. buy sugar in bulk  need to keep a sharp watch on the policies and uplifting of restrictions. 

Water Conservation and Ethanol Promotion

Joshi highlighted the significant water consumption of sugarcane and underscored the necessity of research and development to reduce water usage. He also stressed the importance of balancing the interests of both consumers and farmers while promoting ethanol, a byproduct of sugarcane, especially in the context of climate change. The minister's comments reflect a broader strategy to integrate sustainable practices within the sugar industry.

Ethanol Blending Success

During the "Sugar & Bio-Energy - Emerging Vistas" workshop organised by the International Sugar Organization (ISO), Sanjeev Chopra, Chairman of ISO and India's Food Secretary, lauded India's ethanol blending program. He noted that ethanol blending with petrol has significantly increased from 1.2% in 2013-14 to 12.5% by May 2024. The government aims to achieve 20% blending by 2025-26, with a substantial shift towards grain-based ethanol production due to constraints on using cane juice for ethanol.

Industry Dynamics and Future Prospects

Industry sources highlighted that the current ethanol supply of 327 crore litres is nearly evenly split between grain-based and sugarcane-based distilleries. However, due to government restrictions on converting cane juice to ethanol, grain-based plants are expected to contribute more significantly to future ethanol supplies. To meet the government's target of 15% ethanol blending in the current Ethanol Supply Year (ESY), the requirement is around 700 crore litres, with oil marketing companies already contracting about 648 crore litres.

Potential Impact on Indian Sugar Exporters

The government's cautious approach to allowing sugar exports, dependent on monsoon performance, presents a significant uncertainty for Indian sugar exporters. With production potentially increasing, but exports restricted, there may be an excess supply in the domestic market, leading to potential price drops. Exporters may face challenges in finding international markets for surplus production, especially if global prices are not favourable. Additionally, the emphasis on ethanol production and the restrictions on using cane juice for ethanol could shift focus and resources within the industry, potentially impacting sugar availability for export.

In summary, while India anticipates a rise in sugar production, the government's export policy and emphasis on ethanol production introduce complexities that Indian sugar exporters must navigate to maintain profitability and market presence.

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