The Indian Sugar and Bio-Energy Manufacturers Association (ESMA) has advocated for the government to permit the export of 2.0 million tonnes of sugar in the current marketing year. This proposal aims to address the surplus sugar stocks and enhance the financial liquidity of sugar mills for timely payments to farmers. Despite the ban on sugar exports in the current year to stabilize domestic prices, ESMA emphasises the need for strategic measures to manage surplus production effectively.

Addressing Liquidity Concerns And Production

ESMA's plea for sugar exports highlights the urgent need to alleviate liquidity concerns among sugar millers. By allowing the export of surplus sugar, millers can generate additional revenue streams to meet their financial obligations, particularly in paying sugarcane dues to farmers. This initiative aims to strike a balance between domestic market stability and the financial health of sugar producers.

With sugar production estimated to reach high, the industry faces challenges associated with surplus stocks. The projected net production for the 2023-24 marketing year is approximately 3.2 million tonnes, with additional output expected from mills in Karnataka and Tamil Nadu. ESMA's proposal takes into account the anticipated surplus stocks and aims to mitigate potential costs for millers arising from idle inventory.

Market Movements, Forecasts, And Export Allowance

ESMA anticipates a moderate crushing season in 2024-25 due to various factors, including favorable weather conditions and early announcements of sugarcane prices. Consequently, higher stocks are projected for the upcoming year, highlighting the importance of proactive measures to manage surplus production. Against this backdrop, ESMA urges the government to consider allowing sugar exports to maintain market equilibrium.

The proposal to export 2 million tonnes of sugar seeks to balance domestic consumption, ethanol blending programs, and the financial sustainability of sugar mills. By facilitating exports, the government can ensure adequate stocks for domestic needs while enhancing the liquidity of sugar producers. This strategic intervention will support the long-term viability of the sugar industry and promote stability in the agricultural sector.

The advocacy for sugar exports by ESMA reflects the industry's proactive approach to addressing surplus production challenges. By permitting sugar exports, the government can effectively manage surplus stocks, support farmers through timely payments, and enhance the financial sustainability of sugar mills. This initiative aligns with the broader goal of ensuring market stability while maximizing export opportunities for the sugar industry. As such, policymakers must consider ESMA's proposal and implement measures that promote the growth and resilience of the sugar sector.