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Sugar Mills to Pay More Than Rs. 1,00,000 crores to Cane Farmers This Season

The government is also encouraging sugar mills to divert excess sugarcane to ethanol, which is blended with gasoline and not only serves as a green fuel but also saves foreign currency on crude oil imports

Shivam Dwivedi
Sugarcane Farmers working in their Field
Sugarcane Farmers working in their Field

This season, sugar mills will pay more than Rs. 1,000,000 crores to sugarcane farmers. The current sugar season 2021-22 is expected to produce 13% more sugar than the previous sugar season. According to revised estimates, sugar production in the current sugar season 2021-22 is expected to be around 350 LMT (after discounting the diversion of 35 LMT of sugar to ethanol) versus an estimated domestic consumption of around 278 LMT. At the start of the sugar season 2021-22, there was approximately 85 LMT of carryover stock.

Even after a likely export of around 95 LMT, the current sugar season's closing stock at the end of September 2022 is expected to be greater than 60 LMT. Sugar is available in sufficient quantities in the country to meet domestic demand. As a result, sugar will be readily available, and domestic sugar prices are expected to remain stable at reasonable levels.

Under the chairmanship of Secretary (F&PD), Government of India, a virtual meeting was held today with the State Principal Secretaries (Sugar) and Cane Commissioners/Directors (Sugar) of the State Governments to assess the area under cane cultivation, Sugarcane and Sugar Production for Sugar Season 2021-22 (October-September), as well as export of sugar and diversion of sugar for ethanol production.

The government is also encouraging sugar mills to divert excess sugarcane to ethanol, which is blended with gasoline and not only serves as a green fuel but also saves foreign currency on crude oil imports. Approximately 3.37 LMT, 9.26 LMT, and 22 LMT of sugar were diverted to ethanol over the last three sugar seasons of 2018-19, 2019-20, and 2020-21, respectively.

During the current sugar season (2021-22), approximately 35 LMT of sugar is expected to be diverted to ethanol, and by 2024-25, approximately 60 LMT of sugar is expected to be diverted to ethanol, addressing the problem of excess sugarcane as well as the issue of delayed payment as farmers would receive timely payment.

From Ethanol Supply Year (ESY) 2013-14 (Dec – Nov) to ESY 2020-21 (Dec – Nov), sugar mills/distilleries generated approximately 53,000 crore revenue from the sale of ethanol to Oil Marketing Companies (OMCs). Sugar mills are expected to generate more than 18,000 crores in revenue from the sale of ethanol to OMCs during the current fiscal year 2021-22.

As of 18.4.2022, approximately 92,480 crores in cane dues had been paid to farmers in the previous sugar season 2020-21, out of 92,938 crores in cane dues payable. As a result, 99.5 percent of the previous sugar season's cane dues have been paid.

As of 18.4.2022, approximately 74,149 crores of total cane dues payable of 91,468 crores had been paid to farmers, representing more than 80% of total cane dues payable. Sugar mills are expected to pay farmers more than 1,00,000 crores in cane price payments during the current sugar season. The increased export of sugarcane and the conversion of sugarcane to ethanol have accelerated cane price payments to farmers.

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