Amid rising inflation in the country and ongoing uncertainty due to tension in West Asia, the central government has banned the export of sugar till September 30. This step of the government has been taken with the aim of increasing the availability of sugar in the domestic market and controlling the prices, but sugar industry experts have strongly criticized this sudden decision. According to experts, due to this step, the price of sugar in the domestic market will fall drastically, the debt burden on the mills will increase and the sugarcane farmers will have to bear the direct loss.
Global deals and image will be negatively affected
According to Bhairavnath Thombare, president of the West Indian Sugar Mills Association, sugar prices have already started falling in the domestic market. Expressing concern, he said that this sudden ban on exports till September 30 will tarnish the image of Indian sugar mills in the global market. India mainly exports sugar to Sri Lanka, Bangladesh, Afghanistan, Nepal and Arab countries and the ban has jeopardized the businesses of traders who had already finalized deals with these countries.
It will be difficult for farmers to pay their FRP dues
There is a possibility that the cash flow of mills will be affected due to stoppage of exports, which may cause major disruption in the payment of farmers (Fair and Remunerative Price or FRP). Thombre said that sugar mills in Maharashtra alone owe FRP about Rs 1,550 crore, while at the national level this debt is about Rs 12,000 crore. In such a situation, it will become very difficult for the mills to pay the dues of the farmers. Although the area under sugarcane cultivation will not reduce, farmers will not be able to get adequate profits from their produce.
Unstable policies and demand for ethanol blending
The industry alleges that the government does not have any clear and definite policy for the sugar sector. Jaiprakash Dadegaonkar, former president of the National Federation of Cooperative Sugar Factories Limited (NCFCSF), said that sugar-related organizations have been demanding higher sugar prices for the last four years, but on the contrary, the government increased the FRP four times. Dadegaonkar says that due to this the sugar industry has already been significantly affected and the current ban will further weaken the financial condition of the mills.
As a solution to the current crisis, Thombare suggested that the government should increase purchases of sugar-based ethanol to compensate for the export ban. The use of ethanol in petrol should be increased from the current 20 percent to 30 percent, so that sugar mills can get financial support.