The Centre on Thursday introduced an incentive for sugar mills within the type of an extra home gross sales quota to those who export sugar and divert the commodity in direction of ethanol making, within the new 2021-22 season beginning October.
Sugar mills have additionally been requested to make the most of agency world sugar costs and plan export of uncooked sugar prematurely within the new season (October-September), it mentioned.
This signifies that the federal government is unlikely to increase the export subsidy from the brand new season, as it might be simpler for home mills to promote sugar overseas in view of agency world costs.
India, the world’s second-largest sugar-producing nation, needed to provide export subsidies prior to now two years, to scale back surplus shares and assist cash-starved sugar mills clear cane fee to growers.
In a press release, the meals ministry mentioned, “Sugar mills which will export sugar and divert sugar to ethanol would also be given incentive in the form of additional monthly domestic quota for sale in the domestic market.”
Currently, the federal government fixes a month-to-month quota for the sale of sugar within the home market. On a median, about 21 lakh tonne quota is fastened for a month-to-month sale for mills.
According to the ministry, some sugar mills have additionally signed ahead contracts for exports within the new season.
The world sugar costs have elevated considerably prior to now one month, and there’s a large demand for Indian uncooked sugar, it mentioned.
Accordingly, the ministry mentioned it has requested home sugar mills to plan manufacturing of uncooked sugar for export functions within the new season from the start.
The ministry additionally requested mills to “sign forward contracts with the importers to take advantage of high international prices of sugar and global deficit”.
Export of sugar and diversion to ethanol would assist in bettering the liquidity of mills, enabling them to make well timed fee of cane dues of farmers. It may also stabilise ex-mill value of sugar within the home market, which in flip will additional enhance mills’ income realisation and deal with the issue of surplus sugar, it mentioned.
With a rise in mixing ranges, the ministry mentioned the dependence on imported fossil gasoline will lower and also will cut back the air air pollution apart from boosting agricultural economic system, it added.
On exports undertaken thus far within the present 2020-21 season, the ministry mentioned mills have contracted for export of seven million tonnes, towards the necessary quota of six million tonnes fastened for the present season ending subsequent month.
Out of this, greater than 5.5 million tonne of sugar was exported until August 16, it mentioned.
Exports stood at 5.96 million tonnes in 2019-20, 3.8 million tonnes in 2018-19, and 6,20,000 tonnes in 2017-18 season.
Due to the development in liquidity of mills following authorities measures, the ministry mentioned Rs 75,703 crore cane dues of the 2019-20 season have been cleared by mills and solely Rs 142 crore arrears are pending now.
In the continuing 2020-21 season, mills bought a report sugarcane price about Rs 9,07,872 crore, towards which about Rs 81,963 crore cane dues have already been paid to farmers, it mentioned.
According to the ministry, sugar mills made a income of Rs 22,000 crore from the sale of ethanol prior to now three seasons.
In the continuing 2020-21 season, about Rs 15,000 crore income is being generated by sugar mills from the sale of ethanol which has helped mills in making well timed fee of cane dues to farmers, it mentioned.
For ethanol making, mills had diverted 9,26,000 tonne of sugar in 2019-20 and three,37,000 tonne in 2018-19. And, within the present season, greater than 20 lakh tonnes is more likely to be diverted.
In the brand new season, about 35 lakh tonnes of sugar is estimated to be diverted; and by 2024-25, about 60 lakh of sugar is focused to be diverted to ethanol, which might deal with the issue of extra sugarcane/ sugar in addition to delayed fee concern, the ministry mentioned.
“However, as the adequate ethanol distillation capacities would be added by 2024-25, export of sugar will continue for another 2-3 years,” the ministry added.