"Rains were strenuous this year, particularly August was dry, and again October is dry. It has impacted cane production in Maharashtra and Karnataka substantially," said Singh. However, he noted that Uttar Pradesh was largely unaffected by the uneven rainfall.

 

Uttar Pradesh, Karnataka, and Maharashtra together contribute 80 percent of India’s sugarcane production, which touched 500 million metric tonnes in the October-September 2021-22 season. India experienced its most subdued monsoon in half a decade this year and any decrease in agricultural production will intensify the burden on the government to manage food price surges before the upcoming elections.

 

“We try to educate our farmers on how to cultivate cane with lower water application,” Singh said, referring to the company's adaptive measures.

 

While some regions faced water scarcity, regions such as UP have consistent groundwater availability, making them less vulnerable to dry spells.

 

The government on Wednesday declared a continuation of its export limitations on various forms of sugar, encompassing raw, white, refined, and organic sugar. This announcement, made by the Directorate General of Foreign Trade (DGFT), goes beyond the initial deadline set for October 31. Notably, this new limitation does not affect sugar exports to the European Union and the United States.

 

"It's logical. If you are short of a commodity in the country, the country gets the priority, and our consumer gets the priority," said Singh.

 

Domestic prices

 

While exports are controlled by the government and dictated by quotas, Singh remains optimistic about the domestic market, ensuring that there will be no shortages and consumers won't face high prices.

 

In 2022-23, India implemented a quota system, limiting sugar exports to roughly 6 million tonnes after late-season rainfall affected production, a reduction from the previous year's unrestricted 11 million tonnes.

 

Part of the country’s sugar output is diverted to make ethanol to be blended with petrol. Shree Renuka Sugars recently increased its ethanol capacity to 1,250 kilo-litres per day from 720 KLPD, making it one of the largest producers of ethanol in India.

 

The company acquired Anamika Mills, which has a capacity of 4,000 MT of cane-crushing capacity per day, on October 12. The company plans to fund the acquisition through borrowings and internal accruals, said Singh.

 

Speaking about the company’s gross debt doubling in the past three years, Singh said, “EBITDA has shown very robust growth and increased by 45 percent year-on-year. Debt reduction is a continuous process and we will continue to take suitable action in due course of time.”

 

Singh remained optimistic about the sugar sector's future, highlighting the government's supportive policies.

 

"After a long time, the sugar industry has become a stable business," he said.