The 3rd edition of the Sugar and Ethanol India Conference organised by ChiniMandi in New Delhi was a big success. The Conference saw an integration of experts and thinkers who delved deep into sugar, ethanol and allied industries and gave us a blueprint of the future.
The Conference was a melting pot of more than 600 people who came under one roof to talk about sugar, ethanol and allied industries. The inaugural session saw senior Government officers and industry bigwigs grace the Conference. Shri Aswani Srivastava, Joint Secretary (Sugar), Department of Food and Public Distribution addressed the august gathering. He asked ChiniMandi to present a White Paper on the key discussion and outcome of the Conference, and assured us that the Ministry will give it a positive thought.
The distinguished luminaries who were present at the Conference included- Shri Atul Chaturvedi– Executive Chairman of Shree Renuka Sugars Ltd., Shri Prabhakar Rao- President of ISMA, Shri Roshan Lal Tamak- CEO of DCM Shriram, Shri Narendra Mohan- Director of National Sugar Institute (Kanpur), Shri Sandeep Kadam- MD of EDF Man India, Ms. Manisha Gupta- Group Commodities Editor of CNBC-TV18 etc, Shri Vishal Nirani – Co-founder & ED of TruAlt Bioenergy, Mr. Rahil Shaikh – Director of MIER Commodities, Mr. Sanjay Khatal – MD of Maharashtra State Co-Operative Sugar Factories Federation Ltd., Mr. Sanjay Awasthi- President of STAI and Chief Executive, ISGEC etc. Two international sugar experts of repute- Dr. Claudiu Covrig and Mr. Julian Price enthralled the gathering with their S&D forecast and gave a teaser of global production, pricing and market prediction. The day had a fair share of discussions on the future investment prospects in sugar and ethanol, and value maximisation by way of developing existing products of the sugar industry and leveraging innovation to build newer product mix to generate revenue and help augment farmers’ income.
Senior government ministers graced the occasion on the second day of the event. Speakers engaged in useful discussions regarding the outlook of sugarcane crop in India in 2024-25, and whether the forecast is bullish and bearish, coupled with sugar production, consumption with prospects to meet the target of E20 by 2025-26.
What were the key trends and themes that emerged at the Conference? A detailed understanding of the discussions suggest-
A. Higher than expected sugar production in current season
When the current sugar season of 2023-24 started in October 2023, there were cautious noises of sugar production falling as compared to previous season, due to rain-affected cane crop in Maharashtra and Karnataka. There were estimates that the sugar production in the current season could be below 300 LMT. However, a broad consensus was achieved at the Conference wherein speakers said that the current sugar production would be above 300 LMT, around 315 LMT. And the closing sugar stock of the season will be higher.
B. Vagaries of monsoon
Almost every speaker agreed that irregular monsoon rains will continue to adversely affect the cane crop. This was seen in the current sugar season, and going forward the vagaries of monsoon would affect cane crop and sugar production. It was also felt that the cane crop in the 2025-26 sugar season which will commence from October 2024, will be greatly dependent on monsoon rains in June 2024. There is also a possibility of El Nino conditions changing to La Nina, which could be an important factor to watch out for. Next couple of months are crucial.
C. New cane varieties
There was consensus in the house regarding development of high yielding cane varieties, and those which can withstand any weather conditions- droughts or floods. Sugar mills were urged to invest more into Research and Development, and work along with sugarcane institutes in the country to develop newer cane varieties. It was felt that this was the need of the hour, which will help India have a more stable sugarcane policy as well, and less Governmental intervention.
D. Slim chances of sugar exports
Looking at the current sugar production estimate and Government’s priority regarding the ethanol programme, it was felt that the country will not have the luxury of sugar export any time soon. It was felt that any additional sugar availability in the current season will be diverted towards ethanol production. The sugar industry has already made representation to the Government to allow additional 10-12 lakh tons of sugar diversion towards ethanol production this year. Hence, sugar exports look suspended as of now.
E. 2024-25 sugarcane crop prospect
The house agreed that in the next sugar season, both Maharashtra and Karnataka are expected to have a poor cane crop, unless rainfall picks up in June 2024. As far as U.P. is concerned, there was agreement that sugar production in the State will continue to be steady.
F. Sugar consumption is growing
There is good news for sugar mills. Post covid, sugar consumption seems to have improved. The speakers at the Conference said in unison that sugar consumption is expected to grow in 2024-25 SS. The consensus is seen in the range of 280 LMT to 290 LMT. However, one speaker did raise concern regarding the diabetes cases in India. He said this could be a dampener to the overall sugar consumption growth projection in the country.
G. Sugar prices have bottomed out
There were discussions regarding the fact that sugar prices have weakened across the markets due to excess sugar availability. Experts said that in order to generate more cash flows to initiate cane price payment to farmers, sugar mills are selling more sugar in the market. It was felt that prices have bottomed out. It is expected that sugar prices will improve from hereon.
For further inquiries or to contact Uppal Shah, Editor-in-Chief, please send an email to Uppal@chinimandi.com.