Government Prioritizes Ethanol Production Over Sugar Exports Amidst Industry Demands

As India faces a year marked by drought, the central government’s decision to prioritize ethanol production over sugar exports has sparked debates within the sugar industry. The Indian Sugar Mills’ Association (ISMA) has been vocal about its request to export 2 million tonnes of sugar, citing a surplus in production. However, this demand is unlikely to be met as the government shifts its focus towards building ethanol reserves to ensure adequate domestic sugar supplies and stabilize prices.

Despite the ISMA’s push for exports, the government’s stance stems from the need to keep sugar prices affordable for consumers, especially in light of reduced sugar availability for ethanol blending due to drought conditions. This decision is part of a broader strategy to balance domestic sugar consumption with the ethanol blending program, which has been impacted by unpredictable weather patterns and the consequent fluctuation in sugar production.

The ongoing situation has led to a rise in sugar prices, despite a surplus in production. The outlook for the 2024-25 sugar season remains uncertain and heavily dependent on the upcoming monsoon season, which will play a critical role in determining production levels and potential exports.

The industry’s frustration is palpable as it faces constraints in accessing international markets, which could have absorbed the surplus and mitigated financial pressures on local sugar mills. This tension highlights the complex interplay between local supply demands and global market opportunities, challenging the government to find a sustainable balance that supports both national interests and industry growth.