Sugar production continues to fall, output till Dec 15 dips by 10.7%

Co-op sugar factories estimate full-year production to be 12% less in FY23-24

Sugar production in India continued to fall and till December 15 was up to 10.7 per cent less than in the same period last year, the latest numbers from both the Indian Sugar Mills Association (Isma) and National Federation of Cooperative Sugar Factories (NFCSF) showed.

While Isma said till December 15 around 7.40 million tonnes was produced in the 2023-24 season, the NFCSF’s crushing report showed that production was 9.2 per cent down year-on-year at 7.43 million tonnes.

The sugar season runs from October to September. Isma and the NFCSF cover almost all sugar companies operating in India, private or cooperative.

The data should further curtail hopes of an increased diversion of sugar for ethanol this year after the Centre earlier this month prohibited it.

Isma, meanwhile, in the statement said till December 15, the number of sugar factories operating in the country was 497, which is similar to last year.

“This year sugar factories in Maharashtra and Karnataka started 10-15 days later than last year,” Isma said.

The NFCSF, on the other hand, said despite El Nino and the retreating rains, Maharashtra, Uttar Pradesh, and Karnataka, the leading states in sugarcane and sugar production across the country, had maintained their momentum.

The NFCSF hoped if the current trajectory continued India might end up producing around 29.1 million tonnes of net sugar (after accounting for diversion for ethanol) in the 2023-24 season, which would be almost 12 per cent less than the same period last year.

A few days ago, the central government in a surprise decision summarily stopped sugar mills from producing ethanol from sugarcane juice or syrup to ensure that excess sugar was not lost in the process.

The step has been taken to cool sugar prices and improve availability as the curb would plough back almost 2.3 million tonnes of sugar back into the available stocks.

However, with the sugar industry widely protesting the move, the food ministry, along with oil-marketing companies (OMCs) and others, worked out a compromise under which mills would be allowed to divert 1.7 million tonnes for making ethanol, which includes juice, as against the earlier estimated 4 million tonnes.

“The government’s sudden decision to ban ethanol production on December 7, 2023, created an atmosphere of worry and confusion in the sugar industry across the country. Distillery projects across the country have invested nearly Rs 35,000 crore in the ethanol production capacity expansion plants. Because of the December 7 decision, they would have become sick due to their inability to pay instalments of loan interest on time. There was a risk of such projects becoming financially ill and that too for no fault of theirs. However, the central government has given some relief to the sugar industry by modifying its earlier decision through its December 15 order,” said Jaiprakash Dandegaonkar, president, NFCSF. 

Grains ethanol makers demand increase in quantum of maize

The Grains Ethanol Manufacturers Association (GEMA) in a letter to Petroleum and Natural Gas Minister Hardeep Puri demanded that quantum of subsidised maize promised to be provided to them to keep the ethanol blending program going in the aftermath of drop in sugar production should be raised to 1-1.5 million tonnes for both Nafed and NCCF. This is against the 0.1 million tonnes provided through each agency currently. GEMA also demanded that the price at which it is being supplied to distilleries should also be just MSP of Rs 20.90 per kg and not more.