The country’s sugar industry has become somewhat like its hands and feet tied while an opportunity like gold is in front of it. Generally, the price of sugar per ton in the international market is five hundred to five hundred and fifty dollars; But today’s price has risen to 712.50 dollars due to the creation of sugar crisis in this market. This was a good opportunity from the point of view of a country like India which is a leader in sugar production. The situation is that we cannot take this opportunity to get a large amount of valuable foreign exchange when it is standing at the door.
As a result, customers stand with arms outstretched; But a situation has arisen where we are unable to fulfill their demand. The reason for this is the betrayal given to us by sugar production. Sugar production was estimated to go up to 380 lakh tonnes this year i.e. 2022-23 season; But unseasonal rains, inclement weather, lack of a solid and consistent policy to balance production and demand have thrown the forecast off course. The mentality of not being able to support the sugarcane producer at the root of the sugar industry and the farmers suffering losses due to the mismatch of production costs are also some of the important reasons behind it.
Earlier estimates of sugar production were lowered to 360 lakh tonnes; But in reality, excluding the sugar required for ethanol, only 321 lakh tonnes have been produced. It will go up to a maximum of 330 lakh tonnes. Compared to this, the demand for sugar in the country is increasing continuously. Earlier it was 230 lakh tonnes. It increased to 250 lakh tonnes and this year it went up to 275 lakh tonnes. As per rules, a reserve quota of 60 lakh tonnes i.e. buffer stock has to be kept. This means that 335 lakh tonnes is needed out of domestic demand of 275 lakh tonnes and reserve quota of 60 lakh tonnes. That means, how will this need be met, only so much sugar is available this year. As per the current rules, only 60 lakh tonnes of sugar is allowed to be exported; But it is allowed to increase as per requirement. Assuming last year’s reserves, 60 lakh tonnes have been exported so far; However, it was expected that another 20 lakh tonnes of sugar would be allowed to be exported. It seems that it cannot be fulfilled.
In the last season bumper 400 lakh tonnes of sugar was produced and due to this almost 110 lakh tonnes of sugar could be exported. As the production of sugar has decreased significantly compared to last year, it has been decided to restrict the increased export. Of course, it has hampered the way to earn foreign currency by taking advantage of international market conditions. Among the major suppliers in the international market are India, Brazil, and Thailand. The boom and bust in this market depends on the production status of the major supplier countries. The production of Brazil, Thailand has also decreased like India. Since Brazil has also followed the path of ethanol, it has also affected the availability of sugar from that country. In our country too, sugar is being converted to ethanol, which is also proving beneficial for the industry. It is not affordable to just store sugar till it is sold. If it is paid for ethanol, it is repaid in 21 days. There are other reasons for not allowing exports, such as possible price hike and import timing, sugar consumer, inflation control, upcoming elections etc. and these are not to be ignored.
The next season of sugar production also depends on the conditions of the upcoming monsoon. If the rainfall remains low, there is a fear that the production of sugar will decrease again. If that happens, there may be a shortage of imports. That is why this export was banned. One lesson to be learned from all this is that emphasis should be placed on increasing the production of sugar, i.e. sugarcane as an alternative. If we talk about Maharashtra, this year despite the decrease in production, Maharashtra remained the first in sugar production in the country. About 115 lakh tonnes of sugar is being produced in the state this year. Efforts should be made to increase it. Of course, on the one hand sugarcane is a water-consuming crop, while the need to reduce the area under sugarcane is being expressed, on the other hand, the idea of increasing the area under sugarcane is also being discussed.
The question is how to get out of this. For that, the domestic demand of sugar, including sugar for domestic and industrial consumption, has to be decided by matching the sugar production. If there is a discrepancy in this, it directly affects the sugarcane producer. There has often been a demand for adopting a dual system of concessions to general consumers and market rates for industrial and commercial use. There is no problem in thinking about this. Although the central government has set a minimum selling price of Rs 3100, the market price is above Rs 3500. The price in the retail market is Rs 35 to Rs 40 per kg. There is a demand that the minimum selling price should be 3600 to 3800. There are still many opportunities like ethanol in the sugar business. It should also be implemented. Doing so will give strength to the industry. Farmers can also get fair remuneration for their labor. For that, the government has to decide a comprehensive policy in this regard.
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