Discomfort in industry due to ministry's stance on sugar export and buffer subsidy

With crushing in sugar mills, the problems of sugarcane farmers and the sugar industry have started increasing. The sugar industry has started feeling restless due to the recent trend of sugar exports. The cash crisis can deepen in the coming days due to the payment of cane farmers' dues, which is not possible without reducing the sugar stock.

For this, the only option is to make ethanol from sugar and increase exports. Union Consumer Affairs and Food Minister Piyush Goyal said, "Sugar prices in the domestic market have gone up to Rs 40 per kg, so there is no need to consider the option of export at the moment.

During the last sugar year, buffer stock subsidy and export subsidy were announced to give relief to the industry and to repay the cane arrears to the farmers. 60 million tonnes of sugar were also decided to export. According to the sugar industry organization ISMA, sugar mills owe about Rs 8000 crore to sugarcane farmers. About the same amount (8100 crores) is owed to the government of buffer stock subsidy and export subsidy. In this regard, the Union Food Secretary Sudhanshu Pandey said that till now a total of 57 lakh tonnes of sugar has been exported, for which sugar mills have currently claimed Rs 5100 crore.

The payment process is going on, which will be settled soon. Given the demand for sugar in the global market at present, the mills export increased domestic stock carryover stock of 110 lakh tonnes of sugar has been recorded on the first day of the current crushing season from October 1. The total crushing season is estimated to produce 310 million tonnes of sugar. The new sugar stock will come at a time when there is a plan to produce ethanol from 2 million tonnes of sugar. Thus, the total stock will be 420 lakh tonnes, with domestic consumption of 260 lakh tonnes. That means there will be 160 lakh tonnes of surplus sugar in stock.

The sugar industry can get relief only by increasing exports, this is not possible without government help. Brazil's sugar will reach the global market only after April, before that the Indian sugar industry can take advantage of this opportunity. With the additional domestic stock of 160 tonnes, it could entail around Rs 55,000 crore. If this happens, sugar mills will be unable to pay the sugarcane farmers, which will be a big challenge.