Agri Business

Call to allow diversion of more sugar for ethanol manufacture

PTI New Delhi | Updated on August 28, 2019

The sugar sector is in trouble from surplus production

With sugar supply expected to be at a record level 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 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.

Challenging year ahead

“The next year is going to be the most challenging one. The total availability of sugar would be 43 mt , setting a new record in the history of India’s sugar sector,” NFCSFL President Dilip Walse Patil said, addressing the 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 mt 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.

Minimum support price

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 financial stress that the country’s sugar sector is going through will be reduced and a financially confident sugar industry will emerge,” 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 on time.

Published on August 28, 2019

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