Business & Economy

India’s Sugar Sector as Maharashtra and Karnataka Report Surge in Cane Yield, Leading to Increased Sugar Production”

The crushing year 2023-24 is anticipated to witness a notable increase in production, thanks to enhanced yields in the key sugarcane-producing states of Maharashtra and Karnataka.

Reports from millers in both states indicate a significant rise in per-hectare yield, prompting a revision of production figures by 10 to 15 percent. Nationally, sugar production is expected to reach 305 lakh tonnes, compared to the initial estimate of 291.50 lakh tonnes at the beginning of the season, according to officials.

The surge in production is attributed mainly to the Marathwada, Ahmednagar, and Solapur regions of Maharashtra, along with the northern belt of Karnataka. Bhairavnath B Thombare, CMD of Natural Sugar and Allied Industries, headquartered in Latur, stated that unseasonal rain has proven beneficial for both states, with a remarkable 15 percent increase in per-hectare yields in their region.

Industry insiders have disclosed that, based on the latest estimates, Maharashtra is expected to produce 90 lakh tonnes, while Karnataka’s production figure is projected to stand at 42 lakh tonnes. An additional 10 percent increase in Uttar Pradesh’s 110 lakh tonnes production would contribute to the country’s total estimate of around 305 lakh tonnes.

The initial concerns about potential sugar scarcity are now alleviated, given the surplus availability. With domestic consumption at 280 lakh tonnes and a carryover stock of 50 lakh tonnes, the current excess sugar availability is reported to be at 75 lakh tonnes.

Capitalizing on the increased sugar supply, the industry is advocating for the reinstatement of the original ethanol blending program. In December, the central government temporarily banned ethanol production from sugar juice or syrup, restricting mills to produce ethanol only from B heavy or C molasses. However, the ban was later lifted, allowing the diversion of 17 lakh tonnes of sugar for ethanol production.

Industry experts anticipate the announcement of a second tranche that could further allow the diversion of 25 lakh tonnes. Sugarcane mills in Maharashtra, having invested Rs 17,000 crore in ethanol production, are facing financial challenges due to the sudden ban. Representatives from the industry are set to meet Union Minister Piyush Goyal and his secretary to appeal for the reinstatement of the original ethanol diversion program, emphasizing its crucial role in supporting the financial health of mills and the earnings of farmers.

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