Farmers likely to be benefitted from the move
Government of India is taking proactive measures to boost the export of surplus sugar and diversion of sugar to ethanol to ensure timely payment of cane dues of sugarcane farmers and to boost the agricultural economy. The government has been encouraging sugar mills to divert surplus sugar to ethanol and has been providing financial assistance to sugar mills to facilitate the export of sugar, thereby improving their liquidity, enabling the farmers to make timely payments of cane price dues of sugarcane farmers.
In the last three sugar seasons 2017-18, 2018-19 and 2019-20, about 6.2 Lakh Metric Tonne (LMT), 38 LMT & 59.60 LMT of sugar has been exported. In the current sugar season 2020-21 (October – September), the government is providing assistance of Rs 6000/MT to facilitate the export of 60 LMT of sugar. Against the export target of 60 LMT, contracts of about 70 LMT have been signed, more than 60 LMT has been lifted from sugar mills and more than 55 LMT has been physically exported from the country, as of August 16, 2021.
Some sugar mills have also signed forward contracts for export in the ensuing sugar season 2021-22. Export of sugar has helped in maintaining demand-supply balance and stabilising domestic ex-mill prices of sugar. In order to find a permanent solution to deal with the problem of excess sugar,
In the past three sugar seasons about Rs 22,000 crore revenue was generated by sugar mills/ distilleries from the sale of ethanol to Oil Marketing Companies (OMCs). In the current sugar season 2020-21, about Rs 15,000 crore revenue is being generated by sugar mills from the sale of ethanol to OMCs which has helped sugarcane mills in making timely payment of cane dues of farmers.
Diversion of maximum sugar to ethanol and export of maximum sugar would not only help in improving the liquidity of sugar mills enabling them to make timely payment of cane dues of farmers but would also stabilise the ex-mill price of sugar in the domestic market, which in turn will further improve the revenue realisation of sugar mills and would address the problem of surplus sugar. With an increase in blending levels, dependence on imported fossil fuel will decrease and will also reduce air pollution; and it will also boost the agricultural economy.
