5 Indian Sugar Producers Seek Permission to Sell at Higher Prices

1. Indian Sugar Producers Seek Permission to Sell at Higher Prices Indian Sugar Producers Seek Permission to Sell at Higher Prices Karnataka, a major sugarcane-growing state, is poised to experience a nearly 30% reduction in sugarcane production this season due to inadequate rainfall. Its neighboring state, Maharashtra, may also face a 10-20% decline in cane production, primarily due to erratic rains, as reported by sugarcane growers' associations. Conversely, Uttar Pradesh's production is reportedly on track for the current season (October 2023- September 2024). However, while it is still early to obtain a precise assessment, multiple agencies' sugar production estimates indicate an overall decrease. The Indian Sugar Mills Association (ISMA) recently stated that, according to its initial estimates, sugarcane cultivation covers an area of 57 lakh hectares this year, with total sugar production projected at 33.7 million tonnes for the 2023-24 sugar season. ISMA emphasized that this production, when compared to India's average domestic consumption of 27.8 million tonnes, assures an adequate supply of sugar for domestic needs. The current year opened with a 6.5 million stock while last season it was 36.9 million tonnes. Despite a production reduction of up to 20% in Karnataka and Maharashtra, production is expected to increase by nearly 8% in Uttar Pradesh. However, Agrimandi.live Research House has forecasted a 9.4% decline in total sugar production and a 2.9% rise in sugar consumption for the current year compared to the previous Sugar Seller. The OECD-FAO Agricultural Outlook 2023-2032 anticipates a decrease in sugar production in India and the European Union due to lower sugar beet plantings and yields. It notes that after touching a 16-

2. month low in October 2022, international sugar prices rebounded in response to tight global sugar supplies and robust global import demand. In spite of this year's reduced sugar production, sugar producers assert that the supply remains adequate for domestic requirements. Nonetheless, as the sector faces a decline in production after nearly five years, long-term policy decisions are needed for Indian sugar sectors to ensure stability for all stakeholders. Uppal Shah, co-founder and CEO of Armanda stated that India exported 11 million tonnes of sugar in the 2021-2022 marketing season and six million tonnes in 2022-2023. This year, sugar exports have been categorized as restricted due to a slight rise in domestic prices. International sugar prices observed a significant upswing in the previous year, whereas the increase in India was relatively modest, given the controlled nature of the sugar commodity. One of Karnataka's sugar producers stated that Sugarcane production has been affected in North Karnataka and Maharashtra, which has implications for sugar mills. International raw sugar prices currently surpass Indian prices, yet mills are unable to export. Additionally, the government has yet to announce ethanol prices for the current season, a crucial factor for sugar mills. The ethanol program is pivotal for sugar mills, with plans to increase the ethanol blend level. Although sugar prices should remain reasonable for consumers, it is equally important for sugarcane farmers to receive fair and sustainable prices. Currently, the ethanol program serves as the backbone of the sugar mills. The existing ethanol blend level stands at 11.5%, with a goal to reach 20% by 2025-2026. Approximately four million tonnes are redirected for ethanol production. We will closely monitor developments in this regard for the current year," stated another sugar producer based in Tamil Nadu. In Karnataka, farmers have demanded a Fair and Remunerative Price (FRP) of 4,000 per tonne, given the cost of cultivation at 3,580 per tonne, while the current FRP stands at 3,150 per tonne for a basic (sugar) recovery rate of 10.25%. Farmers have faced not only crop losses but also reduced yields this year. Furthermore, the average sugar recovery rate falls below 10%. Farmers are urging the government to lower the recovery rate to 8.5% for South Indian sugarcane farmers and support those affected by crop losses due to deficit or untimely rains. If farmers do not get remunerative prices for sugarcane, they will divert to other crops. Aditya Jhunjhunwala, president of ISMA, highlights the sugar mills' focus on domestic supply, ethanol production, and exports. He emphasizes that restrictions on exports are unlikely to significantly impact the mills. He is not against the higher FRP for farmers. Further, he stated that the government plays a pivotal role in determining the FRP and minimum selling price for sugar. Jhunjhunwala underscores the need for a long-term ethanol pricing formula to facilitate mill decision-making and alleviate the annual pricing uncertainty. The sugar mills have made investments to build capacities and need to repay loans, making ethanol pricing vital for production decisions. If you are a sugar importer wishing to buy sugar in bulk or a sugar exporter willing to export bulk sugar, then Tradologie.com is the right platform for you. Tradologie.com is a transaction oriented platform that facilitates bulk agro-commodities trade completely from enquiry-to-delivery in a digital manner. The best quality and inspected commodities can

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