Sugar mills are hopeful of achieving the targetted 10 per cent ethanol blending target this supply season (December 2021-November 2022) after a record 8.1 per cent ethanol blending last season. This comes at a time when actual sugar exports have more than doubled in the first two months of the current 2021-22 season that began on October 1, amidst a pick up in the production of the sweetener with more factories commencing crushing operations this year.

The Indian Sugar Mills Association (ISMA), the apex trade body of private mills, said on Monday that during 2020-21 ethanol supply season, which ended on November 30, distilleries across the country supplied 302.30 crore litres to oil marketing companies, achieving an all-India average blending of 8.1 per cent, a record over previous season’s 5 per cent. For the 2021-22 season, the government has set a blending target of 10 per cent.

Against a total requirement of 459 crore litres of ethanol for 10 per cent blending, OMCs have so far allocated a total of 366 crore litres after first two cycles of expression of interest (EOI). In other words 317 crore litres allocated against an offer of 414 crore litres in the first cycle of EOI and 49 crore litres against an offer of 82 crore litres in second cycle of EOI.

“We hope to achieve 10 per cent blending in the current year as the remaining requirement is expected to be allocated in subsequent EOIs,” ISMA said in a statement.

Further, ISMA estimates that that over 6.5 lakh tonnes of sugar have been physically exported out of the country by November-end compared with 3 lakh tonnes in the same period a year ago. Total deals for sugar exports of about 37 lakh tonnes has already been contracted for exports in the current sugar season 2021-22.

Slow export deals

ISMA, however said that most of these contracts were signed when the global sugar prices were in the range of 20-21 cents per pound of raw sugar. Signing of export contracts have slowed down a bit during the last fortnight or so due to a fall in global prices of raw sugar to around 19 cents/pound. Though, currently global prices have recovered to some extent and are hovering around 19.5 cents per pound, exports are still not viable for Indian sugar, ISMA said.

“There is a general opinion that since more than nine months are still left in the current season, there is enough time for the sugar mills to wait for an opportune moment when they would like to enter into export contracts. The international trade houses are also of the opinion that the world prices will need to move up from the current levels if the world wants Indian sugar mills to export another couple of million tons of sugar in the next 7-8 months or so,” ISMA said.

Meanwhile, as of December 15, sugar production stood at 77.91 lakh tonnes, up by 4.57 lakh tonnes over same period last year, due to the early start to crushing in the western region of the country. About 479 mills were crushing cane in the current 2021-22 sugar season as against 460 mills in the previous season.

Till mid-December in the current 2021-22 sugar season, in Uttar Pradesh, 117 mills have produced 19.83 lakh tonnes, about 2.77 lakh tonnes lower than same period last year’s 22.60 lakh tonnes. In Maharashtra, 186 mills have produced 31.92 lakh tonnes this year. In the same period last season, 173 mills had produced 26.96 lakh tonnes in Maharashtra. In Karnataka, 69 mills have produced 18.41 lakh tonnes as compared to 16.65 lakh tonnes in the same period last year.

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