“Government should hike Sugar MSP to ₹3600” – Sanjay Awasthi

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Sugar surplus is bitter for the country. The excess sugar production in India has depressed the prices and also affected the cash flow of the mills. The fact remains that the struggle of millers to pay the cane dues have piled into tall cane arrears although the proactive sops given by the Government through various relief packages have helped the millers in some way to reduce these arrears for the time being.

In a conversation with ChiniMandi.com, Mr.Sanjay Awasthi – President of The Sugar Technologists’ Association of India – shares his views on the current scenario of the Indian sugar industry and ways to overcome the crisis.

Below are the excerpts:

Q. What are your views on the measures taken by the government looking at the current sugar scenario?

A. As far as the sugar production of the previous and current season is considered, we have a lot of pressure. This year the Indian sugar production even surpassed Brazil’s sugar production and we are heading towards a record production of 32.5-33 MMT against the consumption of 26MMT. So, if we sum up last year’s opening stock of 10.5 MMT and this year’s surplus we will have a surplus stock that can cater to next 6-7 months consumption.

Thanks to the Central Government’s timely initiatives in assisting the industry to overcome various problems. I feel the industry needs to gear up which currently they are lacking, and some of the millers are even spoiling the game by selling sugar below the Minimum Selling Price which has been recently hiked from ₹2900 to ₹3100.

When I emphasize on the Government sops, one of the best measures taken which is going to prove to be the best decision made is the Bio-fuel Policy of 2018.

The sugar factories which have distilleries with ethanol facilities should partially divert juice for ethanol as the ethanol price is Rs.59.70/liter and balance juice for sugar production. The sugar production will also give molasses to run a distillery 150 days with molasses and 150 days with cane juice. This will reduce sugar production and sugar prices will also improve resulting in demand and supply to be balanced.

Q. According to you how will the biofuel policy play a vital role to overcome hurdles?

A. The Central Govt. has the vision to achieve 20 percent ethanol blending with petrol by the next decade. The first milestone of 10 percent of ethanol blending with petrol will probably be achieved next year as we have already hit 8% this year.

Since the Govt., has done its job by giving a premium over the price for ethanol produced from ‘B’ heavy molasses and sugarcane juice. This will also sap some of the sugar from the market and would be instrumental in maintaining the demand and supply gap.

Now it’s time for the industry to help itself and create the necessary infrastructure and facilities to produce ethanol both from B-heavy and sugarcane juice on a regular basis. The Bio-fuel policy also allows the use of other feedstocks to manufacture ethanol that includes damaged food grains, rotten potato, corn, surplus food grains if any, etc. The industry should also think of the production of ethanol through 2G or 3G technologies.

Q. According to you, what other steps should the government take for the betterment of industry?

A. I think if the Government sets the MSP to ₹3600, the industry would have a maximum part of its hurdles overcome. When the maximum retail prices of ₹42- ₹44 were digestible to the Government as well as the consumers a few years ago, a hike in MSP with ₹5 would really not harm any consumers.

To ensure the same situation doesn’t reoccur in the upcoming season, the government has to typically ensure that exports get going despite losses and realize that the significant surplus would be more harmful.

Q. How can India become a key player in the global market?

A. For this, the industry must change its manufacturing process from DS (double sulphitation) which is not acceptable in global markets or even by bulk consumers in India to raw/refined sugar. The industry should also take up production of demerara sugar, pharmaceutical grades of sugar, liquid sugar etc. if the Indian sugar industry seriously wants to be a prominent player in the global sugar market.

Apart from the above, there is another area that needs prompt attention of the industry i.e. varietal improvement and varietal balance of sugarcane crops. The industry should sincerely start looking for new sugarcane varieties of the crop as the current variety Co0238 has lived for almost 10 years and we also are well acquainted that the longest shelf life is approximately 12-15 years. It is high time that factories, research institutions, breeders and sugarcane experts should come together and work for the development of a new variety which is an onerous work as it takes around 7-8 years. This should be taken as an alarm and not depend on a single sugarcane variety which has covered 65-70% of the crop area in sub-tropical India.

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