The sugar industry in India has been persistently urging for an increase in ethanol prices, and it may soon see an upward revision.
In an exclusive interview with CNBC Aawaz, Hemant Shah, Co-Founder and Deputy CEO of Agrimandi.live Research, spoke on expected ethanol price hike. He stated, “I anticipate a 3% rise in the ethanol procurement price for the upcoming ethanol supply season, in line with the recent 2.6% increase in the Fair and Remunerative Price (FRP) for sugarcane. The government is expected to announce the ethanol price hike on or before October 31, 2023.”
The government has been making consistent efforts to boost ethanol production to achieve its target of a 20% ethanol blending in petrol by 2025. The expected price increase aligns with the government’s commitment to keeping ethanol blending goal on track.
Regarding the recently released second tranche of sugar quota for October 2023, Hemant Shah commented, “The government has released 15 lakh metric tonnes (LMT) of sugar for the second tranche of October’s quota, valid till October 31. Previously, 13 LMT had been released as the first tranche of the domestic sales quota for October 2023. With the festive season approaching, the government aims to meet demand by releasing quotas in tranches.”
Discussing international sugar prices, Shah observed, “The current international sugar market is witnessing a bullish trend, influenced by various factors, including an expected lower sugar production in India for the upcoming season, projected at around 30.5 million metric tonnes (30MMT), compared to the 32.9 million metric tonnes produced in the previous season. India is not export-ready yet due to lower sugar production in the country. We don’t expect any government decision on sugar export anytime soon. Globally, a sugar market deficit of 3 million metric tonnes is anticipated. Given the supply deficit, the international market is likely to remain bullish. We anticipate London White Sugar prices to rise to $820 from the current $720 levels. Similarly, raw sugar prices are expected to increase to $28.5-$29 from the current $27.18 levels.”
