Decision on sugar export depends on actual surplus, says Food Secretary Chopra

The Indian Sugar and Bio-Energy Manufacturers Association (ISMA) has sought approval for 20 lakh tonnes (lt) of sugar exports. The Union Food Secretary, however, remained non-committal maintaining that the government would take a call based on the actual surplus as the first two priorities are to ensure sufficient domestic availability and to divert towards ethanol.

Speaking on the sidelines after addressing the annual general meeting (AGM) of ISMA on Thursday, Food Secretary Sanjeev Chopra said: “There is some surplus and how that will be used, whether it will be used for diversion (to ethanol) or otherwise, that call will be taken in due course. As of now, there is no decision on exports.” He declined to comment on when a decision would be taken.

Buffer stock target

Addressing the gathering of private sugar millers, Chopra said the sugar production in current season, that started October 1, is estimated to be 320 lt whereas the domestic consumption is seen as 285-290 lt and diversion towards ethanol at 40 lt. After factoring in the carryover stock of 79 lt from the previous season, the closing stock at end of September 2025 may be 69 lt.

The government aims to keep a buffer of 2.5 months’ consumption, or 60 lt, to cover the start of the crushing season, assuming monthly use of 24 lt. This leaves a surplus of 9 lt for export.

However, all these calculations are based on the production estimate, which ISMA on Thursday said the gross output (including diversion towards ethanol) may be between 325 lt and 330 lt. “ISMA will undertake another round of survey through satellite data and also using actual crushing report in January to estimate the sugar production,” said Gautam Goel, who has now become the new president of the industry body after the tenure of M Prabhakar Rao got completed.

Goel said that the closing balance will be about 80 lt in current season which is much above the domestic requirement of 56 lt for first two and half month’s sugar consumption. He also said the domestic consumption will drop to 280-285 lt this season against about 295 lt in 2023-24.

Ethanol diversion

Asked about any possibility of further diversion towards ethanol over and above 40 lt, Goel ruled out any such plan is possible at this stage saying “plan is made in advance by mills as to how much ethanol will have to be produced directly from sugarcane juice and accordingly crushing of sugarcane is aligned.” He said the industry may think about it next season as it has more ethanol capacity than what has been committed so far.

Oil marketing companies have placed an order for supply of 312 crore litres from sugarcane-based distilleries in the first round of tender in the current ethanol supply year (November-October).

Chopra also raised a concern about some mills selling excess sugar in the market than their monthly allotted quota and informed the gathering that the government has decided to align the sugar portal with GSTN from January 2025 to cross-check any discrepancy in furnishing the monthly declaration submitted by mills on production and sales number.

Raising MSP

With regard to another demand of the industry to raise the minimum selling price (MSP) of sugar, which was last revised in 2019, sources said that it may be marginally hiked depending on the political situation as election campaign for Delhi assembly poll has begun.

Addressing the gathering virtually thorough video conferencing, Road Transport Minister Nitin Gadkari assured ISMA to consider their demands for export and hike of MSP if the industry body represents their case at the committee of ministers, headed by cooperation minister Amit Shah.

Seeking the increase in MSP of sugar, outgoing ISMA President Rao said when in 2018, the government introduced it, fixing at ₹29 per kg, it was immensely beneficial since the decision came after domestic sugar prices had hit historic low. The MSP was increased to ₹31 in February 2019 and there is no revision after that whereas the fair and remunerative price (FRP) of sugarcane has been raised five times in last six years.

“In line with this, the price of sugar should also increase to at least match the cost of production,” Rao said adding (though) ISMA has estimated the cost of sugar production for the 2024-25 sugar season at ₹41.66 a kg, even if the MSP is revised to ₹39.14, it will improve financial sustainability for the sugar industry.