Page 53 - BCML AR 2019-20

approval entailed an estimated expenditure of C6,260 crore for the government covering marketing costs, handling, upgrading, other
processing costs, international and internal transport and freight charges on export up to 6 million tonnes (MT) of sugar, limited to the
maximum admissible export quantity allocated to sugar mills for SS 2020.

Sugar price

The government announced a Fair and are expected to remain stable within C31 supported by increased minimum selling
Remunerative Price of C275 per quintal of per kilograms to C33 per kilograms even prices (MSP) and lower sugar estimates
sugar cane at 10% sugar recovery with a as production has declined. Sugar prices for the season 2019-20 despite high sugar
premium of C2.75 for every 0.1% increase averaged between C31 per kilograms to inventories.
in recovery. India’s ex-mill sugar prices C34 per kilograms during this sugar season

Key government initiatives

Minimum selling price: With the Sugar cane price: The Central and Buffer stock: The Central government
objective to benefit sugarcane farmers State governments (like Uttar Pradesh) announced a buffer stock of 4.0 million
and help clear cane arrears, the Union maintained FRP and SAP, protecting the tonnes to take care of the excess inventory
Government increased the minimum prospects of sugar manufacturers. in the system on which holding charges in
selling price (MSP) of sugar from C29 Exports: The government provided form of interest and insurance are being
per kilograms to C31 per kilograms from millers with an export subsidy of C10,448 reimbursed.
February 2019.
per tonne.

Ethanol

The India ethanol market is projected to Ethanol can now also be produced target. In 2019-20, oil companies signed
grow to $ 7.38 billion by 2024, catalysed directly from cane juice and from contracts for 1.7 billion litres; contracts of
by a CAGR of 14.50% during 2019-2024. B-Heavy (BH) molasses in addition to an additional 200 million litres are in the
The Government plans to enhance the conventional route of production pipeline. The country enjoys an ethanol
ethanol production to 9 billion litres from through C-Heavy (CH) molasses. The price demand of 5.11 billion litres from oil
3.55 billion litres by 2022 complemented of ethanol from sugarcane juice was fixed marketing companies. On account of a
by a fuel blending rate of 10% by 2022. at C59.48 per litre; ethanol extracted from decline in sugar production during the
To achieve this target, the Government B-Heavy molasses was priced at C54.27 year, only 5.6% of the ethanol blending
provided an approval to 362 new ethanol per litre; the price of ethanol extracted could be achieved in 2020.
plants to add 5.5 billion litres of installed from CH molasses was fixed at C43.75
capacity for an investment of C18,000 per litre. India requires 5.11 billion litres
crore. of ethanol to address its 10% blending

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