Amid mounting pressure from the industry, the Government is unlikely to take any decision before mid-September on allowing sugar export, official sources said.
The government’s cautious approach is likely due to an anticipated robust closing stock of over 85 lakh tonnes (lt) by the end of September, as well as the need to assess the monsoon spread next month.
“There is no concern on sugar as far as its availability is concerned as the carry forward stock from this season will exceed 85 lt. Besides, the sugarcane acreage is almost at par with last year. However, the monsoon rainfall in September needs to be watched out as flooding for a longer period will affect cane,” said an official source.
The India Meteorological Department (IMD) has predicted above normal rainfall for September, quantitatively over 106 per cent of its long period average of 16.79 cm.
Higher inventories
The government’s conservative estimates point to a sugar production of at least 322 lt; whereas Indian Sugar and Bio Energy Manufacturers Association (ISMA), in its preliminary estimates, has said the country may have 333 lt of sugar. Both the estimates are without taking into consideration the quantity of sucrose to be diverted for ethanol. The Food Ministry will wait for the production estimates of sugarcane, which is expected to be released by the Agriculture Ministry in the third week of September, the sources said.
According to ISMA, the sugarcane area has declined to 56.08 lakh hectares (lh) from 59.44 lh. But, the Agriculture Ministry said that sugarcane acreage this year has increased a tad higher to 57.68 lh as on August 2, from 57.11 lh year-ago.
In a letter to Food Minister Pralhad Joshi, Rashtriya Lok Dal President and Minister of State for Skill Development Jayant Chaudhary urged to allow 20 lt of sugar for export apprehending a fall in domestic prices due to good production.
Ethanol priority
However, sources said the government will prioritise diversion towards ethanol production since there was a cap on it in the current season. The pressure on sugarcane for ethanol may be more due to high rates of maize, the sources said, adding next season will be crucial as there has been a target of 20 per cent ethanol blending with petrol (EBP) programme.
In the current ethanol supply year, that began from November 2023, the EBP has already reached 13.5 per cent; whereas the oil marketing companies (OMCs) are blending at 15 per cent for past three months, the sources said.