Sugar exports may face some challenges this season

The sector is now on its feet and intervention of government year by year will reduce.

The Secretary for Food and Public Distribution, Sudhanshu Pandey, on Tuesday said that sugar exports from India may face challenges in the 2021-22 season even though 1.8 million tonne had already been contracted at the start of the season itself.

Addressing the All India Sugar Traders Association (AISTA) on global sugar, he said that last year India was able to export 7.2 million tonne of the sweetener to various destinations and almost 50% of this went to three countries — Indonesia, Afghanistan and Sri Lanka.

“These countries have different dynamics this year. Thailand’s production is likely to go up this time and so Thailand sugar will try to find its lost market in Indonesia. Indian sugar will have to compete for Indonesia market again. Instability in Afghanistan may impact our exports to the country and Sri Lanka has a huge foreign currency shortage. And therefore, a new arrangement will have to be thought of by the industry so that export market is also served,” he observed.

Pandey said that the country is planning to divert about 3.5 million tonne for ethanol production next year and by 2023, the target is that at least 6 million tonne of sugar should be diverted for ethanol production. But at the same time, we are also looking for new opportunities for export, he explained.

More than 50 million farmers and their families are dependent on the sugar sector and proper pricing policy needs to be encouraged for the sugar sector. The food secretary expressed hope that sugar production this year would be as per estimates and the average cane recovery goes up because farmers are using better varieties and techniques for planting cane.

Subodh Singh , joint secretary, sugar said that in last 10 years the country has produced surplus sugar every year and has become a structural surplus sugar country. That has created challenges for the country. “The opening stock in 2019-20 was 14.5 million tonne and then in 2021, the opening stock was 11 million tonne and this season it may be around 9 million tonne. The opening stock is reducing every year because of our policies on export and diversion of sugarcane towards ethanol,” he said. The sector is now on its feet and intervention of government year by year will reduce.

Singh said that the government expects exports of nearly 6 million tonne in the 2021-22 season as well. “In 2019-20, India exported around 6 million tonne and in 2020-21 the country exported 7 million tonne. Next year we expect another 6 million tonne in 2021-22 to liquidate surplus sugar,” he said.

Singh said that this year the total production is estimated at 34 million tonne and around 3.5 million tonne may be diverted for ethanol production, 6 million tonne for exports and the overall balance should be 7 million tonne since domestic consumption is around 26.5 million tonne. He urged mills to export at least 15-20% of their production so that the sugar prices in the domestic market stabilise and mills are able to pay farmers. He also stated that the government shall not provide any assistance for exports this season and urged the industry to educate consumers to increase sugar consumption as well.