Ethanol policy might lead to a cut in India’s sugar production to 30.5 million tonnes next season

India’s sugar production is likely to decline marginally to 30.5 million tonne in the next 2021-22 season as more sugarcane is being diverted for ethanol making. Sugar production was estimated to have reached 31 million tonne in the 2020-21 season (October-September). India is the world’s second biggest sugar producer after Brazil.

“Sugarcane crop by and large is good this year. We are expecting diversion of more cane for ethanol making and as a result sugar production will be slightly lower at 30.5 million tonne during 2021-22 season,” Joint Secretary in the Food Ministry Subodh Kumar Singh told PTI.

In the current season, cane meant for production of 2 million tonnes of sugar was diverted for ethanol making, while in the 2021-22 season cane meant for production of 3.5 million tonne of sugar will be diverted.

However, sugar production will be sufficient to meet the domestic consumption, which is expected to increase by 3,00,000-4,00,000 tonnes at 26.3-26.5 million tonnes in 2021-22 season. The domestic consumption in the 2020-21 season is estimated to be 26 million tonne.

With the likely opening stock of sweetener is estimated at 9-9.5 million tonnes and expected production of 30.5 million tonne, the total availability of sugar in the 2021-22 season will be 39.5 to 40 million tonnes. The domestic consumption is seen around 26.5 million tonne, while exports at 7 million tonne in the next season. The closing stock at the end of the next season would be around 6-6.5 million tonne. This year, about Rs 83,000 crore cane dues have been cleared so far against the total Rs 91,000 crore payable in the current season.

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