Govt should allow more sugar diversion for ethanol making: NFCSF

With sugar supply expected to be at record level in the next year, industry body NFCSF on Wednesday urged the government to allow diversion of more sugar for ethanol making and at least 7 million tonnes of export.

The country is likely to have total 43 million tonnes of sugar supply during the 2019-10 marketing year (October -September), taking into account 14.5 million tonnes of carryover stock and likely production of 28.5 million tonnes next year, National Federation of Cooperative Sugar Factories (NFCSF) said.

"The next year is going to be the most challenging one. The total availability of sugar would be 43 million tonnes, setting a new record in the history of India's sugar sector," NFCSFL President Dilip Walse Patil said, addressing 60th annual general body meeting of the cooperative.

There is a "dire need" to allow diversion of as much sugar for ethanol making and permit export of at least 7 million tonnes of the sweetener, he said, and hoped that the government will soon come out with robust policies in this regard.

On exports, Patil urged the government to announce the export policy as early as possible, and continue to give WTO compatible fiscal support.

He also demanded early creation of a price stabilisation fund to help the industry in times of crisis.

Patil also requested the government to compute all finance costs, including depreciation in re-fixing sugar minimum support price, in order to bring it at par with average cost of production.

"Once we do this, the current financial stress that the country's sugar sector is reeling through will get diluted and pave way for creation of financially confident sugar industry for years to come," he asserted.

The sector is in trouble due to surplus sugar production and depressed price situation. The mills are not able to make payment to sugarcane growers due to financial crunch. However, the government has stepped in and taken several measures to ease their burden and ensure farmers' payment is made on time.