New Delhi — A robust fuel ethanol policy by the government could help absorb the high domestic stocks and supply glut in the Indian sugar market, president of Indian Sugar Mills Association (ISMA), Rohit Pawar, said at the S&P Global Platts 10th Asia Sugar & Ethanol Conference in New Delhi Tuesday.
Pawar added that the ethanol policy should focus on finding alternative sources of renewable energy, while developing production flexibility to divert surplus cane into either sugar or ethanol.
While India experienced two bumper crops in the recent two marketing seasons, exports were tepid on the back of weak global prices.
This has resulted in a large carry-over stock of 14.58 million mt into 2019-2020, equivalent to seven months of India's annual consumption, ISMA data showed.
The increase in sugar production by 25% over the ten-year period is due to rising cane acreage coupled with better cane varieties, resulting in higher yields and sucrose recovery.
Apart from exporting the excess sugar, Pawar explained that if the production capabilities of Indian sugar mills are further developed, this could potentially divert more sugar and ethanol in the coming years.
ISMA has estimated India's sugar production in 2019-20 at 26.85 million mt, without considering the impact of sugar reduction because of the diversion of B-heavy molasses and sugarcane juice to Ethanol, almost 19% lower than last season.
After considering the diversion of B-heavy molasses and sugarcane juice to Ethanol, ISMA estimates India's sugar production at 26 million mt.
In 2018-19, India produced 500,000 mt less sugar because of diversion of B-heavy molasses to ethanol.
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