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ISMA warns of sugar industry crisis if ethanol prices remain unchanged

The Indian Sugar Mills Association (ISMA) has raised concerns over a potential crisis in the sugar industry, warning that many sugar mills could struggle if ethanol prices are not revised soon.

Ethanol production has become a crucial revenue source for sugar mills, especially as sugar prices fluctuate.

Ethanol sales allow mills to diversify their income streams, providing a stable revenue source that helps balance out losses when sugar prices drop.

In recent months, ethanol has become increasingly important as sugar prices have declined.

In an interview with CNBC-TV18, ISMA President Prabhakar Rao emphasised the urgency of government intervention to ensure stability of the sugar industry, and support the broader ethanol-blending initiatives.

Rao pointed out that the delays in the crushing season that is leading to a drop in sugar prices.

While the crushing season in key states like Maharashtra and Karnataka was set to begin in mid-November, Rao suggested that upcoming elections in Maharashtra could lead to further delays.

Average sugar prices, which stood at ₹38/kg last year, have now dropped to around ₹35-35.5/kg due to an excessive buildup of sugar stocks.

Despite the price drop of approximately ₹2/kg, the Fair & Remunerative Price (FRP) for sugarcane has increased by 6%. This rise in input costs puts further financial strain on mills, as they are required to buy sugarcane at a fixed government rate regardless of the market price of sugar.

Sugar Times Team
Sugar Times Teamhttps://www.sugartimes.co.in
The Sugar Times Editorial Team is a group of experienced journalists, analysts, and industry experts dedicated to providing in-depth coverage and insights on the global sugar industry. With years of experience in agriculture, trade, sustainability, and market trends, the team brings a wealth of knowledge and expertise to every article they produce.Focused on delivering accurate, timely, and relevant news, the Sugar Times Editorial Team aims to keep industry professionals, stakeholders, and enthusiasts informed on key developments in sugar production, trade policies, innovations, and sustainable practices. Their collective goal is to help readers navigate the complexities of the sugar sector and stay ahead of emerging trends shaping the future of the industry.You may submit your article on info@sugartimes.co.in if you have valuable contributions for the industry readers.
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