Budget provisions likely to have mixed impact on sugar industry
24-Jul-2024 04:04 PM
Mumbai. The Union Budget has both good and bad news for the sugar industry. There are positive and negative aspects of the budget provisions that will affect the profitability and progress of the sugar industry.
The positive side is that the government will continue to support the ethanol blending program, which is expected to provide overall relief to sugar mills. Sugar mills will not face any difficulty in making ethanol by making good use of molasses.
Along with this, the budget has focused on sustainability of agriculture and bio-energy, which is in line with the long-term interests of the sugar industry.
This may provide some opportunity for its growth and development. The sugar industry may also benefit indirectly through sustainable agricultural methods and processes. This is expected to help millers in better procurement of sugarcane and reducing production costs.
Special attention has been given to renewable energy in the budget, which may provide an opportunity to sugar mills to increase their revenue scope and reduce dependence on the income traditionally obtained from the sale of sugar.
As far as the negative side is concerned, the government has not increased the ex-factory minimum selling price (MSP) of sugar, while the indigenous industry strongly demands it.
There is a regular increase in the FRP of sugarcane. Along with this, no additional assistance has been announced for the production of ethanol directly from sugar syrup.
This could have given some additional income to the sugar mills. Similarly, the lifting of the ban on the export of sugar has also not been announced in the budget.
The sugar industry is disappointed by this. There is a ban on commercial export of sugar since June 2023.
The government is retreating from the liberal policy of import-export of agricultural products and the pressure of government control is being increased on it. Indian sugar is not getting access to the international market.