ISMA urges the Indian government to permit exports of 20 lakh tonnes of sugar to bolster millers' liquidity, citing surplus production and potential financial strain due to idle inventory costs. With domestic production nearing 320 lakh tonnes and a projected closing stock of 91 lakh tonnes by September 2024, ISMA highlights the necessity of exporting to manage surplus and ensure timely payments to farmers.
Highlights
ISMA Urges Government for Sugar Exports: The Indian Sugar and Bio-Energy Manufacturers Association (ISMA) has requested the government to allow exports of 20 lakh tonnes of sugar in the current marketing year ending September 2024.
Boosting Millers' Liquidity: ISMA argues that allowing sugar exports would enhance the liquidity of sugar millers, enabling them to make timely payments to farmers for sugarcane.
Previous Export Limits: In the previous marketing year, around 60 lakh tonnes of sugar exports were permitted by the government to manage domestic supply and control retail prices.
Current Production Estimates: As of the end of April 2024, sugar production has reached approximately 314 lakh tonnes, with an additional 5-6 lakh tonnes expected from mills in Karnataka and Tamil Nadu (NS:TNNP). The final net production for the 2023-24 marketing year is projected to be close to 320 lakh tonnes.
Projected Closing Stock: ISMA estimates a significantly higher closing stock of 91 lakh tonnes by September 30, 2024, compared to the normative stock of 55 lakh tonnes. This surplus could lead to additional costs for millers due to idle inventory and carrying costs.
Expectations for 2024-25 Season: ISMA anticipates a moderate crushing season in 2024-25, influenced by factors such as early announcement of increased Fair and Remunerative Price (FRP) for sugarcane, favorable pre-monsoon rainfall, and forecasts of above-normal monsoon.
Need for Export to Manage Stock: Considering the projections, ISMA emphasizes the importance of allowing sugar exports to manage the surplus stock effectively and ensure sufficient stocks for domestic consumption and the Ethanol Blending Program (EBP).
Overall Impact: Permitting sugar exports not only ensures balance in domestic supply but also contributes to improving the financial health of sugar mills and facilitating timely payments to farmers.
Conclusion
The call by ISMA for sugar exports comes at a critical juncture, with a surplus production looming over the Indian sugar industry. Permitting exports not only alleviates financial pressures on millers but also facilitates efficient management of stocks, ensuring stability in domestic supply and supporting farmers' livelihoods. By striking a balance between domestic consumption and international trade, the government can steer the industry towards sustainability and resilience amidst fluctuating market dynamics.