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Sugar Industry Seeks Export Cap To Boost Ethanol Output Amid Global Price Mismatch
(MENAFN- KNN India)
New Delhi, Apr 7 (KNN) With Indian sugar struggling to remain competitive in global markets, sections of the industry are urging the government to cap exports at around 1 million tonnes and divert surplus production towards ethanol, aligning with the country's energy priorities.
Low Global Parity Hits Sugar Exports
The Indian Sugar and Bio-Energy Manufacturers Association (ISMA) has approached the Prime Minister's Office, proposing a roadmap to scale blending levels to 22 percent, 25 percent and 27 percent.
ISMA emphasised that accelerating ethanol blending is both an economic necessity to utilise existing capacity and a strategic move to enhance energy security.
Industry sources indicate that restricting exports could help stabilise domestic supply while supporting ethanol production, reported Business Standard.
India had permitted sugar exports of 2 million tonnes, but only 0.7–0.8 million tonnes have been shipped so far due to pricing challenges. Indian sugar is currently priced above USD 450 per tonne (FOB), making it less attractive compared to lower global prices.
Push for Higher Ethanol Blending
The proposal gains significance as India has already achieved 20 percent ethanol blending (E20) and is exploring higher targets.
Ministry of Petroleum and Natural Gas, Joint Secretary, Sujata Sharma noted that blending currently stands at 20 percent, though discussions on expansion are ongoing.
Surplus Ethanol Capacity Remains Underutilised
India's ethanol production capacity has reached nearly 20 billion litres, including 9 billion litres from the sugar sector. However, ethanol demand for E20 blending is only 10–11 billion litres annually, leaving a significant portion of capacity underutilised.
Industry stakeholders argue that diverting excess sugar to ethanol could improve utilisation and reduce dependence on fossil fuels.
West Asia Crisis Adds Urgency
The ongoing geopolitical tensions in West Asia have intensified concerns over volatile petroleum prices, strengthening the case for domestic biofuel expansion.
A report by BMI suggested that moving beyond E20 may require further restrictions on sugar exports, which could also support global sugar prices.
The government is also monitoring rising financial stress in the sector, with Rs 16,918 crore in sugarcane dues pending to farmers as of end-March in the current crushing season.
Redirecting sugar towards ethanol production could improve liquidity for mills and enable timely payments to farmers.
Key Takeaway
With weak export demand and rising energy concerns, India's sugar sector is increasingly pivoting towards ethanol-led growth, supported by policy alignment.
Capping sugar exports and boosting ethanol blending could help India balance farm incomes, industrial capacity, and energy security amid global uncertainties.
(KNN Bureau)
Low Global Parity Hits Sugar Exports
The Indian Sugar and Bio-Energy Manufacturers Association (ISMA) has approached the Prime Minister's Office, proposing a roadmap to scale blending levels to 22 percent, 25 percent and 27 percent.
ISMA emphasised that accelerating ethanol blending is both an economic necessity to utilise existing capacity and a strategic move to enhance energy security.
Industry sources indicate that restricting exports could help stabilise domestic supply while supporting ethanol production, reported Business Standard.
India had permitted sugar exports of 2 million tonnes, but only 0.7–0.8 million tonnes have been shipped so far due to pricing challenges. Indian sugar is currently priced above USD 450 per tonne (FOB), making it less attractive compared to lower global prices.
Push for Higher Ethanol Blending
The proposal gains significance as India has already achieved 20 percent ethanol blending (E20) and is exploring higher targets.
Ministry of Petroleum and Natural Gas, Joint Secretary, Sujata Sharma noted that blending currently stands at 20 percent, though discussions on expansion are ongoing.
Surplus Ethanol Capacity Remains Underutilised
India's ethanol production capacity has reached nearly 20 billion litres, including 9 billion litres from the sugar sector. However, ethanol demand for E20 blending is only 10–11 billion litres annually, leaving a significant portion of capacity underutilised.
Industry stakeholders argue that diverting excess sugar to ethanol could improve utilisation and reduce dependence on fossil fuels.
West Asia Crisis Adds Urgency
The ongoing geopolitical tensions in West Asia have intensified concerns over volatile petroleum prices, strengthening the case for domestic biofuel expansion.
A report by BMI suggested that moving beyond E20 may require further restrictions on sugar exports, which could also support global sugar prices.
The government is also monitoring rising financial stress in the sector, with Rs 16,918 crore in sugarcane dues pending to farmers as of end-March in the current crushing season.
Redirecting sugar towards ethanol production could improve liquidity for mills and enable timely payments to farmers.
Key Takeaway
With weak export demand and rising energy concerns, India's sugar sector is increasingly pivoting towards ethanol-led growth, supported by policy alignment.
Capping sugar exports and boosting ethanol blending could help India balance farm incomes, industrial capacity, and energy security amid global uncertainties.
(KNN Bureau)
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