No hike in minimum selling prices of sugar; exports may touch 60 lakh tonnes in 2021-22

India’s food Secretary Sudhanshu Pandey has ruled out any hike in the minimum selling price of sugar from current Rs 31 per kg as domestic rates are higher and expressed confidence that exports will touch 50-60 lakh tonnes in the current marketing year starting October.

Addressing 87th Annual General Meeting (AGM) of the Indian Sugar Mills Association (ISMA), Pandey pointed out that ethanol blending with petrol touched 8.1 per cent during 2020-21 as against the target of 8.5 per cent and stressed on achieving the 10 per cent target in the current year.

He asked sugar mills to invest in creating storage capacity for ethanol so that they can supply the green fuel to OMCs on a regular basis.

Pandey highlighted the government came to the rescue of the sugar industry, which was facing liquidity issues few years back because of surplus production and depressed price.

For the current 2021-22 season, the secretary said that almost 35 lakh tonnes of sugar has already been contracted for exports. The production in Brazil will be less. “We should touch between 50 and 60 lakh tonnes (exports) this year,” he said on the sidelines of the event.

Pandey emphasised on the need to balance India’s sugar production as per the requirement of the global market. Around 20 lakh tonnes of sugar got diverted during 2020-21 for ethanol production and the number is likely to increase to 35 lakh tonnes this year.

By 2025, Pandey said the target should be to divert roughly about 60 lakh tonnes of sugar, which generally is surplus in the Indian context. “Unless we find a good revenue for that remaining surplus 60 lakh tonnes of sugar, the prices in the market will not go up”.

He said domestic sugar demand continues to stagnate around 260 lakh tonnes. Referring to the industry’s demand to increase MSP of sugar to Rs 36-37 per kg from the current Rs 31 per kg, Pandey said: “…because of this diversion and good export, actually, there is no need for the minimum selling price. Because the natural prices in the market have gone up and the prices now are in the range of Rs 34-35 (per kg) very easily.”

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