1 week ago
Experts Link India’s Sugar Price Rise to Lower Cane Output
Sugar prices in India have gone up recently.
Experts say this is mainly because less sugarcane was produced and the cane yielded less sugar.
They do not think ethanol production is the only major reason.
India uses about 280 lakh tonnes of sugar each year.
This year, it produced around 306 lakh tonnes and also had some older stocks.
Some sugar was used to make ethanol and some was exported, but buffer stocks remain.
Experts expect supplies to improve when the main crushing season begins.
They also say longer-growing sugarcane in states such as Maharashtra and Tamil Nadu gives more sugar.
Experts attribute rising sugar prices mainly to lower cane production and reduced sugar recovery rates.
About 31 lakh tonnes of sugar were diverted to ethanol production, while roughly 7 lakh tonnes were exported.
India produced around 306 lakh tonnes of sugar this year against annual domestic requirements of about 280 lakh tonnes.
North India is in a lean crushing season, but production is expected to increase as the main season begins.
Experts say longer cane-growing periods in Maharashtra and Tamil Nadu produce higher sugar recovery than in northern states.
- Who
- Agriculture and sugar-industry experts, including Narendra Mohan Agrawal and Hari Om, discussed the issue.
- What
- Sugar prices have risen, with experts attributing the increase mainly to lower sugarcane output, reduced recovery rates and a lean crushing season.
- Where
- India, particularly northern states, Maharashtra and Tamil Nadu.
- When
- The report discusses the current year and the ongoing lean crushing season in North India.
- Why
- Experts say lower cane production and sugar recovery have tightened supplies; they reject blaming ethanol diversion alone.
Ethanol Diversion View
Production and Recovery View
Main cause of higher prices
Ethanol Diversion View
The ethanol-diversion view links higher sugar prices to sugar being redirected from the market for ethanol production.
Production and Recovery View
The experts’ view is that lower sugarcane production, reduced sugar recovery and the lean crushing season are the primary causes.
Role of government controls
Ethanol Diversion View
This perspective implies that diversion for ethanol and exports can reduce sugar available for consumers.
Production and Recovery View
Experts say the government assesses production, prioritizes domestic consumption and permits ethanol diversion or exports only from surplus supplies.
Outlook for supplies
Ethanol Diversion View
If diversion is seen as the main pressure, limiting it would be the focus of intervention.
Production and Recovery View
Experts expect supplies and price pressure to improve as the main crushing season begins and production increases.
Key facts
- Annual sugar requirement
- Around 280 lakh tonnes in India.
- Current-year production
- Around 306 lakh tonnes of sugar.
- Ethanol diversion
- About 31 lakh tonnes of sugar equivalent.
- Sugar exports
- Roughly 7 lakh tonnes.
- Normal buffer stocks
- 50 lakh tonnes or more.
- Maharashtra recovery rate
- Around 13-14 per cent.
- Northern cane duration
- Typically about 10-11 months.
Quotes
Prof. Narendra Mohan Agrawal
Former Director of the National Sugar Institute, Kanpur
“The government annually assesses sugar production and ensures that sufficient quantities are available for domestic consumption before permitting diversion for ethanol production or exports.”
thehansindia.com
“Therefore, it would not be appropriate to blame ethanol diversion alone for higher sugar prices.”
thehansindia.com
Sources
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