Sugar export ban will trigger price crash, hurt factories, argue industry experts

Sugar industry experts have slammed the Centre’s sudden decision to ban sugar exports, warning that the move will trigger a domestic price crash, inflate debts of factories, and impact cultivators.

India has announced a ban on sugar export till September 30 this year to enhance domestic availability and contain prices. Banning exports of a commodity helps prevent price rise amid inflation concerns and uncertainty caused by the West Asia conflict.

Bhairavnath Thombre, president of the West Indian Sugar Mills Association, warned that domestic prices have already begun to slide, and the sugar factories will find it difficult to clear their Fair and Remunerative Price (FRP) dues.

“When the Government’s sudden ban on exports till September 30 will tarnish the image of Indian sugar factories in the global market,’’ he said.

He said that India exports sugar to Sri Lanka, Bangladesh, Afghanistan, Nepal and Arab countries, and the ban will endanger businesses that have already negotiated deals with these countries.

“Factories in Maharashtra have a Fair and Remunerative Price (FRP) debt of nearly Rs 1,550 crore, while the dues are around Rs 12,000 crore nationally. The area under sugarcane cultivation may not decrease, but cultivators will not earn enough from their yield,” Thombre said. He noted that if the Government has banned sugar exports, it should increase the procurement of sugar-based ethanol.

The Government should increase ethanol use in petrol to 30 per cent from the current 20 per cent. This will increase ethanol procurement from the sugar factories, he said.

Jayprakash Dadegaonkar, former president of the National Federation of Cooperative Sugar Factories Limited (NFCSF), alleged that the Government has no fixed policy for the sugar industry.

“Sugar-related associations have been demanding higher rates for sugar for four years. But instead, the Government increased the FRP four times. This has already significantly impacted the sugar industry. This will further weaken the financial condition of the sugar factories.”