New Delhi: The Indian Sugar and Bio-Energy Manufacturers Association (ISMA), the apex body in the sugar and bio-energy industry in the country, predicts a significant sugar surplus of upto 36 lakh tonnes for the current season. According to the experts, the opening stock of approximately 56 lakh tonnes in October 2023 in addition to forecasted domestic consumption of nearly 285 lakh tonnes for the season, will result in higher closing stock of 91 lakh tonnes by the end of September 2024. This estimated surplus, amounting to 36 lakh tonnes above the normative stock of 55 lakh tonnes, can potentially lead to additional costs for the millers on account of idle inventory and carrying costs.
According to the 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.
In this situation, ISMA has urged the Government to re-consider permitting the export of surplus sugar 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.
Impact of FRP
Government has increased FRP of sugarcane for 2024-25 SS by Rs. 25 per qtl to Rs. 340 per qtl. This huge increase in FRP will directly increase cane cost and thereby cost of production of sugar.
This increase in FRP 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.
Utilising the surplus for the larger benefit
While being aligned with policies laid out by the government, ISMA urges the government to consider request for exports as it will be win – win for all stakeholders, including farmers. Commenting on this, Mr. 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 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”.
