InvestorQ : How did India manage record sugar exports in the year just concluded?
Dia Deshpande made post

How did India manage record sugar exports in the year just concluded?

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swati Bakhda answered.
1 month ago
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Let me tell you that it was not just a year of record sugar exports, but also a record year for sugar production, sugar consumption and for ethanol production. But let me come back to the basic question that you raised on sugar exports. Today, despite being a politically sensitive subject, there is a much greater focus on exporting sugar to ensure that farmer dues are not held up unnecessarily. In the last few years, the government gave specially subsidies to ensure that Indian sugar prices are able to compete with sugar from Brazil and Thailand in the global market. That is evident in the numbers as we shall see.

For the 2021-22 (sugar year) the total sugar exports were up 57% at 10.98 million tonnes. Before we go ahead, let me dwell for a moment on the concept of sugar year. This sugar year is unique to sugar marketing cycle in India and extends from October to September next year. The recent sugar cycle 2021-22 began in October 2021 and ended in September 2022. Now we have just commenced Sugar Year 2022-23, which will extend up to September 2023. This cycle covers the sugar value chain comprising of sugarcane growing, crushing, extraction, sugar production as well as ethanol production.

There are 2 major positive outcomes of this big sugar export number. Firstly, sugar company dues to farmers for sugarcane procurement has come down sharply. The robust exports of sugar have ensured that the sugar companies paid Rs1.12 trillion out of the R1.18 trillion dues payable to farmers, so only Rs6,000 crore is outstanding. There is one more merit in this export figure. This resulted in foreign currency inflows of Rs40,000 crore into India in the current sugar cycle year. Since the start of 2022, the forex reserves with RBI have fallen from $647 billion to $537 billion, so sugar export revenues are like manna from heaven.

As you rightly said, this has been a year of records in sugar. India emerged as the world's largest producer and consumer of sugar and second largest exporter of sugar after Brazil. Farmers produced record 50 crore tonnes of sugarcane, of which 35.74 crore tonnes were crushed. Out of 3.94 crore tonnes of sucrose extracted, 3.59 crore tonnes went into sugar production while 0.35 crore tonnes went into ethanol. All this has happened in a year when the government subsidy was zero. Ethanol production of Rs28,000 crore sets up India for the next blending target of 20% by the year 2025.

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