The government on Tuesday said sugar mills have contracted to export 1.8 million tonnes of sweetener so far in the 2021-22 marketing year, starting this month and asked industry players to ship at least 6 million tonnes to liquidate surplus stocks.
Mills were asked to explore new exports destinations as shipments to Afghanistan could be impacted due to domestic instability in that nation.
Addressing a webinar organised by the All India Sugar Trade Association (AISTA), Food Secretary Sudhanshu Pandey noted that India has been producing surplus sugar since the last four marketing years, while consumption declined last year because of the closure of hotels and restaurants due to the nationwide lockdown.
He highlighted that the government's policy has helped the sugar sector in redefining its positioning in the Indian market and abroad.
Pandey said the country was able to export a record 7.2 million tonnes of sugar in the 2020-21 marketing year (October-September) to various countries.
Out of the total shipments, he said about 50 per cent of the total quantities were exported to Sri Lanka, Indonesia and Afghanistan.
"We are all looking for new opportunities for exports. About 1.8 million tonnes contracts have been executed for exports," Pandey said and hoped that more contracts would be entered into going forward by millers.
The secretary said India will face competition from Thailand in 2021-22 marketing year in exporting its sugar to Indonesia.
"Instability in Afghanistan may impact our export to Afghanistan," he said, adding that Sri Lanka too was facing a foreign currency shortage.
Pandey suggested that the industry might have to make a new arrangement so that it can export sugar to Sri Lanka.
To deal with the surplus stock, the secretary said around 2.5 million tonnes of sugar got diverted towards manufacturing ethanol for blending with petrol.
By 2023, Pandey said the target is to divert 6 million tonnes of sugar towards ethanol making.
Terming the COVID pandemic, climate change and conflicts as major challenges, the secretary said the availability of sugar at affordable rates needs to be ensured.
He said the country is in a position to maintain its place in the sugar sector as a predominant producer and generate surplus production to meet any global shortages.
Pandey assured that "the government policy will continue to support the sector so that sector maintains its viability".
Speaking at the webinar, Subodh Singh, joint secretary (sugar) in the food ministry, highlighted that India has produced surplus sugar in the last 10 years except for the 2016-17 marketing year or season.
Singh said that the government has taken various steps during the last few years to help the sector in dealing with surplus production. He listed out some measures such as fixing the minimum selling price of sugar, and financial assistance for exports as per the WTO norm.
Talking about the 2021-22 marketing year, the joint secretary said that the industry should make efforts to ship at least 6 million tonnes.
He said around 1.8 million tonnes have already been contracted for exports. "So, I think there should not be any problem in exporting 6 million tonnes."
Singh said the domestic prices of sugar will not fall if surplus sugar gets exported and also diverted to ethanol manufacturing.
He informed that the government is not extending any financial assistance in the 2021-22 marketing year.
The joint secretary asked the industry to find new destinations for exports as the country exported mainly to Sri Lanka, Indonesia and Afghanistan during 2020-21.
He also stressed the need to boost the domestic demand for sugar.
According to the industry data, India's sugar export rose 20 per cent to an all-time high of 7.1 million tonnes in the 2020-21 marketing year ended last month. Sugar exports stood at 5.9 million tonnes in the 2019-20 marketing year.
In the 2021-22 marketing year, sugar production is estimated to remain flat at 31 million tonnes. The total availability of sugar is estimated to touch 39.5 million tonnes, including an opening stock of 8.5 million tonnes of sweetener.
Domestic consumption is estimated at 26.5 million tonnes, while exports are estimated at 6 million tonnes. The closing stock would be 7 million tonnes at the end of this marketing year.