India’s sugar industry has said that import duty hike on ethyl alcohol will give positive response to the domestic molasses and alcohol producers as imported product will be costlier by Re. 1 per litre. Budget provisions will provide relief to sugar industry without any impact on sugar prices. Apex industry body Indian sugar mills association (ISMA) has welcomed budget provision. Meanwhile, sugar production increased to 176.83 lac tons till 31 January compared to production of 141.04 lac tons during corresponding period of last season. Operational mills also were 491 as on 31 January, 2021 compared to 447 mills on same date of last season. The government is providing relief to the industry without any impact on sugar prices as it adopted ethanol route for the purpose. Similar to previous initiative, the government has announced measures in the budget also. The import duty on denatured ethyl alcohol is proposed to be increased from 2.5% to 5%, making imports of the same costlier by around Re.1 per litre at the current global prices of denatured ethanol. ISMA has said in a statement that it will increase the demand for domestic molasses and alcohol produced by the Indian sugar industry and grain based distilleries, giving better returns. As per ISMA, the budget also talks of encouraging renewable energy, clean air as well as emphasizes a lot on encouraging Indian agriculture. This will give further boost to the ethanol production from sugarcane and surplus grains/ maize. The sugar industry is very happy to note the allocation in the budget estimates for 2021-22 FY of Rs. 4337 crore for the sugar industry. At the same time, the revised estimates of 2020-21 FY, which now increases the budgetary allocation by Rs. 5376 crore, as compared to the BE, is another very positive decision being taken by the Government. The proposed BE for 2021-22 for the sugar industry is Rs. 2895 crore higher as compared to the BE of 2020-21. Almost all these payments are to be made to the sugarcane farmers and therefore will directly reduce the cane price arrears and benefit the farmer community directly. The provision of Rs.150 crore in the RE 2020-21 and another Rs.300 crore in BE 2021-22 for extending financial assistance to sugar mills for enhancement and augmentation of ethanol production capacity will give further boost to setting up of more ethanol factories in the country. ISMA would also request the Government to extend all benefits and incentives proposed to be given to the sectors who contribute towards improving air quality and increasing renewable energy production in the country, to the Indian sugar industry / distilleries which produce and supply ethanol for blending with petrol.
SUGAR PRODUCTION
In Maharashtra, sugar production till 31 January 2021 is reported at 63.80 lac tons, compared with 34.64 lac tons produced last year same period. In the current season 182 sugar mills are in operation, while on the corresponding date last season 140 mills were in operation. In U.P.,120 sugar mills are in operation and they have produced 54.43 lac tons of sugar till 31 January 2021, compared with 54.96 lac tons produced by 119 mills on the corresponding date of last year. In case of Karnataka, 66 sugar mills have produced 34.38 lac tons, as compared to 27.94 lac tons produced by 63 sugar mills last year same period. Gujarat has produced 5.55 lac tons of sugar till 31 January 2021 with 15 sugar mills in operation. Last year, similar number of sugar mills were in operation and they had produced 4.87 lac tons of sugar till 31 January 2020. In Tamil Nadu, Andhra Pradesh and Telangana, 37 sugar mills are in operation and have produced 3.56 lac tons as on 31 January 2021, as compared to 4.39 lac tons produced by 39 sugar millson the corresponding date last season. The remaining States of Bihar, Uttarakhand, Punjab, Haryana and Madhya Pradesh & Chhattisgarh, Rajasthan, Odisha have collectively produced 15.11 lac tons of sugar till 31st January, 2021. The sugar sales in first three months of the current season i.e. up to 31 December’ 2020 is reported to be more or less similar to last year at around 67.5 lakh tons.