The sugar industry has lowered its estimates for sugar production by about 8 lakh tonnes to 30.2 million tonnes (mt) for the ongoing 2020-21 season due to lower yields and recovery, and the diversion of cane juice and molasses for producing ethanol.
In its second advanced estimates released on Thursday, the Indian Sugar Mills Association (ISMA) has factored in likely diversion of about 2 mt of cane juice and B-molasses for the production of ethanol. ISMA had earlier pegged sugar output at 31 million tonnes for 2020-21 higher than the previous year’s 27.42 mt. In Uttar Pradesh, the largest sugar producing State, mills are expected to produce 10.5 mt, down from previous year’s 12.63 mt due to lower yields and recovery, said ISMA. The decline in UP sugar output is also due to higher diversion of cane for gur , khandsari and towards ethanol production.
Based on the allocations made by the Oil Marketing Companies for supply of ethanol in 2020-21, the UP mills will have diverted about 6.74 lakh tonnes (lt) of sugar towards producing ethanol as against 3.70 lt in the previous year.
Ethanol production
However, in Maharashtra, the second largest sugar-producing State, sugar output is estimated to increase sharply to 10.54 mt from 6.16 mt in the previous year on account of higher cane supplies. Cane area is up 48 per cent in Maharashtra and the yields are reported to be better than the previous season. Based on the OMC allocation, mills in Maharashtra will be diverting 6.55 lt of sugar for producing ethanol in the current season as compared to 1.42 lt in the previous season.
Karnataka is expected to produce 4.25 mt of the sweetener as against 3.49 mt in the previous season on higher cane area. Karnataka mills are expected to divert 5.41 lakh tonnes of sugar for ethanol as compared to 2.42 lakh tonnes, said ISMA said.
These three major producing states are estimated to contribute 93 per cent of the total estimated diversion of sugar into ethanol of about 2 million tonnes.
ISMA said there are no major changes in the other sugarcane growing states of the country, which together is estimated to produce 4.93 million tonnes of sugar this season, almost similar to the last season’s level.
According to ISMA, the country is expected to have much lower closing stock at the end of the season at around 8.9 million tonne after taking into account an opening stock of about 10.7 million tonnes on October 1, 2020.
The industry has welcomed the government’s announcement on export programme of 6 mt and upward revision of ethanol prices for the season. However, the government is yet to announce the implementation of increasing the minimum selling price (MSP) of sugar. This will improve the liquidity of the mills enabling them to make timely cane payment to farmers also, said ISMA.
“The ex-mill sugar prices are already under pressure in almost all the states and to ensure that sugar mills are able to pay to farmers on time, there is need to quickly decide on increasing the MSP of sugar,” ISMA added.