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28-07-2024
Bureau Report + Agencies
NEW DELHI/ MUMBAI: India will make a decision on sugar industry calls for a hike in the minimum selling price (MSP) in the coming days, a senior government official said on Saturday, adding that ethanol policies would be set before the start of the next season.
India, the world’s largest sugar consumer, restricted the use of sugar in ethanol production during the 2023/24 marketing year that ends on Sept. 30 and also prohibited exports to keep a lid on domestic prices.
“We are discussing the MSP (proposal). In the coming days, we will hopefully take a call,” Food Secretary Sanjeev Chopra told reporters during a conference.
The sugar-processing industry has been demanding an increase in the minimum selling price, saying the government has raised the mandatory procurement price of sugarcane in recent years while the MSP has remained unchanged since 2019.
Industry bodies say a higher MSP would enable them to make timely payments to millions of sugarcane farmers in the upcoming season starting on Oct. 1.
Chopra said the production outlook for the next season has improved due to good monsoon rainfall and increased sugarcane acreage, allowing the government to formulate policies for the next year.
The sugarcane area has edged up to 5.77 million hectares (14.3 million acres) from 5.7 million hectares (14.1 million acres) a year ago, farm ministry data showed.
“We should be having very healthy stocks at the end of the present sugar season, which would allow us to have better planning of its diversion in the next year,” Chopra said, referring to sugar’s use in ethanol production.
India is expected to begin the new marketing year with carryover stocks of 8 million to 8.5 million metric tons, he said.
In April, India has agreed to allow oil marketing companies to procure ethanol by diverting an extra 800,000 metric tons of sugar for biofuel production, a government source said on Wednesday.
Concerns over sugar production due to below normal monsoon rains between June and September had led the world’s second-largest to cap the amount that could be diverted for ethanol in the current season to end-September at 1.7 million metric tons but as the supply situation has improved as a result of unseasonal rainfall in Maharashtra and Karnataka, the government has agreed to the diversion of an additional 800,000 tons of sugar for ethanol production, said the senior industry official.
“Many sugar mills produced B-heavy molasses in anticipation of ethanol production. However, these stocks remain unused after the government capped the diversion of sugar for ethanol. Mills can now use stored B-heavy molasses for ethanol production,” said the official, who spoke on condition of anonymity.
In December last year, India has decided to allow sugar mills to divert up to 1.7 million metric tons of sugar for ethanol production, government and industry officials said on Friday, as New Delhi aims to reduce disruptions in its ambitious biofuel program.
As the world’s second-biggest sugar producer, India had previously directed sugar mills not to use cane juice or syrup for ethanol due to concerns over production as drought hit key producing states like Maharashtra and Karnataka.
However, the government opted to permit the diversion of cane juice and B-heavy molasses for ethanol production, capping it at 1.7 million metric tons for the 2023/24 marketing year started on Oct. 1, according to officials.
“A quota will soon be allocated for sugar mills and distilleries,” said a senior government official, who preferred not to be named, following official rules.
