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Sugar Industry Outlook Remains Positive Amid Rising Ethanol Production: AISTA

Updated: Apr 19, 2024 02:43:15pm

Sugar Industry Outlook Remains Positive Amid Rising Ethanol Production: AISTA

New Delhi, Apr 19 (KNN) Driven by steady growth in sugarcane production and the government's successful ethanol blending program the outlook for the Indian sugar sector remains positive, according to All India Sugar Trade Association (AISTA).

In an interview with businessline, Vice Chairman of AISTA Ravi Gupta highlighted that sugarcane production has increased at a compound annual growth rate (CAGR) of 3.5 per cent over the past two years, while sugarcane prices have risen by 5 per cent CAGR, benefiting farmers.

Notably, the government's ethanol blending initiative has transformed surplus sugar into ethanol, with a blending rate of 12 per cent already achieved in the current 2022-23 ethanol supply year (ESY). Gupta believes this shift towards ethanol production indicates a positive trajectory for the industry.

Looking ahead, Gupta emphasises the need for sustainable growth, maximising sugarcane yield on existing land while conserving resources.

He advocates for micro-irrigation, farm mechanisation, and varietal improvement, especially in regions like Maharashtra and Karnataka, to mitigate production volatility.

Despite being five months into the current ESY, ethanol blending remains around 12 per cent, slightly below the target of 15 per cent for this year. Gupta suggests that with the anticipated surplus sugar stock next year, achieving the target rate seems feasible.

To reach the 20 per cent ethanol blending target by 2025-26, Gupta stresses the importance of preparing the necessary infrastructure, including ethanol-dispensing petrol stations and flexi-fuel cars.

Furthermore, Gupta dismisses concerns about ethanol availability, citing India's gross sucrose production of 39 million tonnes in 2021-22, which is 10 million tonnes higher than consumption.

He argues that with favourable monsoon forecasts and recent rains, the prospect of another surplus sugarcane harvest is promising, contributing to expanding ethanol capacity.

Gupta also recommends permitting the export of 1 million tonnes of sugar in the current season, as the opening balance of sugar in the next season may be over 7 million tonnes, even after exports.

(KNN Bureau)


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