Sugar exports on hold as focus shifts to ethanol blending

India has deferred sugar export approvals for the 2024-25 season despite a projected surplus of one million tonnes. The focus remains on meeting domestic demand and supporting the ethanol blending program, which has reached a record 15.83% blending. Sugar production is estimated at 32 million tonnes, with 4 million tonnes allocated for ethanol.

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The government has decided not to allow surplus sugar exports at this stage, despite projections of a one-million-tonne surplus for the 2024-25 sugar season (October-September). The current focus remains on ensuring sufficient supplies for domestic consumption and supporting ethanol production.

Officials have stated that sugar exports will be considered later in the season, with priority given to maintaining domestic stability and sustaining the Ethanol Blending Program. Sugar production for the 2024-25 season is estimated at 32 million tonnes (MT) , while domestic consumption is expected to be 27 MT. An additional 4 MT of sugar has been allocated for ethanol production.

India exported 6 MT of sugar during the 2022-23 season, but no export quota has been issued since then. Authorities are closely monitoring the situation as sugarcane crushing progresses. Industry representatives have requested permission to export 2 MT of sugar, citing concerns over rising carrying costs due to high production and adequate opening stocks.

The ethanol blending program continues to show progress but faces challenges related to the pricing of rice for ethanol manufacturing. The government has allocated 3.2 MT of rice for distilleries at Rs 28/kg, but industry stakeholders have raised concerns over the economic viability of this price. Discussions to address these issues are ongoing.

Blending rates have reached 15.83% as of July 2024, with an average of 13.6% for the ethanol supply year 2023-24. Encouraged by this progress, the government has set a target of achieving 20% blending by the end of 2025-26.

As the world’s second-largest sugar producer, India is balancing domestic requirements with its ethanol production goals to enhance energy security and support the financial stability of sugar mills.