SUGAR INDUSTRY

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India is a major sugar producing country in the world. Sugar season runs from October to September. Currently, there are curbs on sugar exports for an indefinite period. Indian Sugar Mills Association (ISMA) has revised the net sugar production estimate for 2023-24 season to 32 million tonnes.

Sugar export: The government has rejected sugar export possibility for the current season despite industry demand. Indian Sugar Mills Association seeks to export 10 lakh tonnes, citing healthy closing stock. Sugar production exceeded 30 million tonnes and ISMA has revised estimate to 32 million tonnes. Government may allow use of excess B-heavy molasses for ethanol production.

Government remains firm on not resuming subsidised rice sale for ethanol. Chopra encourages maize ethanol production and highlights the impact on distillery investments. Increased sugarcane FRP aims to boost cultivation for the upcoming season.

The rice sale for ethanol makers was discontinued for various reasons, including apprehensions about domestic output and high retail prices, and economic unviability, he said. On the impact on investments on grain-based distilleries, Chopra said, "This is not a policy which is cast in stone. This policy will be renewed... Maize is being encouraged for ethanol production."

Zuari Industries, led by Athar Shahab, focuses on simplifying structures, unlocking value through strategic investments, and expanding into bioenergy. The company plans to deleverage through land monetisation and Dubai project liquidity, supported by cash flows from real estate and sugar projects. Shahab says: "Right now, the biggest source of debt reduction is monetisation of our land parcels in Goa. "

Balrampur Chini Mills shares down 10% in a year, missing sector growth prospects. India produced 25.5M tonne sugar by Feb, down 1% YoY. Maharashtra, Karnataka improved yields, but concerns on sugar diversion remain.

According to the data provided by Maharashtra government, the state’ sugar production as on March 12 stood at 9.9 million tonnes against 10.15 million tonnes produced on the same day of previous year; down by 2.42%. “The sugarcane availability in Maharashtra and Karnataka is higher than what was expected earlier. However, cane availability in another major state Uttar Pradesh is predicted to be lower than earlier estimates,” said ISMA in a statement.

Sugar production stood at 25.84 MT till February in the year-ago period. Sugar marketing year runs from October to September. In its second estimate, the Indian Sugar Mills Association (ISMA) has projected sugar output to decline by 10 per cent to 33.05 MT in the current 2023-24 marketing year as against 36.62 MT in the previous year.

The central government's nearly 7.7% increase in the fair and remunerative price (FRP) of sugarcane is anticipated to impact the profitability of sugar mills negatively, according to credit rating agency ICRA. However, the sugar industry expects the hike in sugarcane prices to enhance competitiveness against crops like maize and rice.

Balrampur Chini Mills Limited (BCML) announced a Rs 2000 crore forward integration project for the first-ever industrial bioplastic plant in India. The project aims to combat climate change, achieve net zero emissions, and promote efficient usage of sugar as a raw material. Stefan Barot's expertise adds value to the project.

The Indian government has released approximately Rs 15,948 crore (about $2.1 billion) under various schemes over the past five years until January 31, aiming to improve liquidity for sugar mills to clear cane price dues owed to farmers. The schemes include creating a buffer stock of 30 lakh tonnes of sugar, defraying expenditure for internal transport, freight, and handling, as well as providing assistance to sugar mills for marketing costs.

India's sugar production, without ethanol diversion, is estimated to decline 10% to 330.5 lakh tonnes in the current marketing year. Maharashtra and Karnataka are likely to see lower output. The gross production in Maharashtra is estimated to fall to 99.9 lakh tonnes, while in Karnataka it may dip to 49.7 lakh tonnes. In Uttar Pradesh, the gross output is seen increasing marginally. The government has allowed sugar diversion of only 17 lakh tonnes for ethanol production. This could result in a net sugar production of around 313.5 lakh tonnes.

Expecting a fall in India's sugarcane production due to drought conditions in Maharashtra and Karnataka, India has banned use of sugar syrup and B-heavy molasses for ethanol. However, despite the sugar production being lower than previous year, citing 'reports', the ISMA has now claimed that the sugar production is likely to be higher than expected earlier.

Maharashtra's sugar production fell to 5.1 million tons from 6.09 million tons, while Karnataka's production dropped 12.7% to 3.1 million tons, the National Federation of Cooperative Sugar Factories said in a statement.

Gadkari said that in the last 10 years, the sugar mills have generated revenue of more than 940 billions Rupees from the sale of ethanol. "The production of ethanol has led to reduction in import of crude oil, which has resulted in saving of valuable foreign exchange for India. In the last year only India has saved about 243 billion Rupees of foreign exchange and improved India’s energy security scenario," he said.

India's sugar output this crop year, hit by weak rains, is set to lag consumption for the first time in seven years, according to traders and a survey of farmers, and lower plantings may even force the world's No.2 producer to import the following year.

The Indian government is likely to permit the diversion of 1.7 million tonnes of sugar for ethanol production, just days after instructing sugar mills and distilleries to cease using sugarcane juice and syrup for ethanol production in the 2023-24 supply year. The directive aimed to address concerns about lower sugarcane production due to adverse weather conditions and rising sugar prices in the domestic market.