The sugarcane and sugar sector in India ranks second in terms of agro-based industries, behind cotton. The crop occupies 50 lakh hectares, or 2.57%, of the total planted area. Sugarcane is grown by about 50 million farmers, and 5 lakh people work in sugar factories. India is now both the world's largest producer and consumer of sugar, surpassing Brazil. India produced 35.8 million tonnes in the marketing year 2021-2022. In the marketing year 2022–2023, it is projected to reach 36.5 million tonnes. In 2022, Maharashtra overtook Uttar Pradesh to retake first place in India for sugar production. As the 2022 year was a watershed year with the highest-ever production, highest-ever export & highest-ever ethanol production, the industry is on the verge to be a major contributor to the energy sector other than just producing sugar. With all this, there are certain expectations that the sugar industry has from the budget for 2023-2024. Lets us see them step by step: ● Firstly, the industry expects the government to revise the prices for the juice to ethanol. The government revised the price of ethanol extracted from the sugarcane to ₹65.60 per liter for the supply year beginning in December 2022. But the industry says that this is inadequate for them to drive additional investment in ethanol production. The industry had requested ethanol from sugar juice at a price based on return on equity with a five-year payback time. This is ₹69.85 per liter, compared to the government's initial announcement of ₹65.61 per liter. Prime minister Narendra Modi has launched the ethanol 20% blend program and he wishes to achieve this by 2025 for that, the industry needs to put in additional investment in capacity building and for that it expects this budget to revise the juice to ethanol prices. ● Also, there are many cooperative sugar industries, especially in Maharashtra which do not have enough profits to make investments for ethanol production or other by-product productions. Such cooperative sugar factories expect the budget to have special loans with low-interest amounts or special subsidies for those who plan to expand their operation in ethanol production. ● There has been demand from many sugar industries that the center reduces the interest on delayed Fair and Remunerative Price (FRP) payments to farmers to 7.5% from the current 15%. The Sugarcane Control Order mandates that FRP payments to farmers be made within 14 days of the sugarcane's acquisition. The judgment also stipulates that the mills must pay interest at the rate of 15% annually if they don't meet the 14-day deadline. Sugar mills have been griping that the unstable sugar market has left their inventories unsold, making it impossible for them to pay FRP to farmers within the allotted time frame. Hence, they expect the budget to have this reform. ● The government has established regulations for the sugar industrial sector, and they must pay the farmers following the FRP. The government has raised FRP rates over the years, which has benefited farmers, but it has not raised the Minimum Support Price (MSP). Every season has an impact on the industry because of high FRP, low recovery rates, and tax demand. Then, to clear the payments within the allotted time, the businesses must take out loans, which requires them to postpone making payments to their creditors and employees. Eventually, this causes the industries to operate at a loss. The industry anticipates that the government will raise the MSP price in this budget. For the period 2023–2028, the sugar cane market in India is anticipated to grow at a CAGR of 5.2%. Due to the rising demand for ethanol, the business has a lot of room to grow. The sugar business has high hopes for this year's budget as a result. Thank you.
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