The year 2024 can safely be described as a year of two halves. The first half was a period when our Prime Ministers pet project ‘Atmanirt- harta” faced serious head winds, and in some sectors nearly got sacrificed at the altar of food inflation. With parliamentary elections in the country, it was understandable that the ruling party would not take any chances which can fuel inflationary pressures in food. The second half of the year was devoted to course correction, and many of the Pre-Election knee jerk decisions were largely reversed. It may not be out of place to call 2024 a “Roller Coaster Year”,
I have been closely associated with oils/oilseed and sugar/ethanol sector, and would confine my comments to these two Important sectors which contribute more than Five Lakh crore in terms of revenue Needless to say that the employment generation capacity of these two sectors is immense and the health of these sectors is vital for the overall health of the Nation.
Sugar Sector
During 2023 India suffered a patchy mon-soon, and armchair analysts and com-mentators predicted a massive drop in cane production in the country. The fear was sugar prices would go through the roof and naturally the decision makers, were alarmed and took immediate game changing decisions to keep a lid on likely bull run in Sugar prices. It’s a different matter that all the doomsday soothsay ers were subsequently proved wrong, and sugar production remained reasonably strong at around 34 million tons (in terms of sucrose). Some decisions which had far reaching consequences are listed below.
Ethanol production from cane juice and B heavy molasses was banned in December 2023 during peak crushing season to conserve Sugar for domestic consumers.
Export of Sugar was banned.
Maize and grain ethanol was heavily Incentivized by giving a rate of 71.86 per litre which was much higher than juice and Bheavy ethanol,
Sugar industry demand for increas- ing MSP (minimum selling price) of sugar as weil as ethanol was put on back bumer..
FRP of cane for the next crushing season starting in October 2024 was announced much earlier than normal.
All these actions definitely kept a lid on sugar prices, but had the potential of driving the sugar and ethanol sec tor to sickness and
reverting to past scenario of huge pending dues of the farmers. With massive investment done in building distilleries the interest outgo has become almost unbearable for sugar sector. Partial course correction has been done in the second half of the year, and juice ethanol and B heavy ethanol are again permitted to be produced.
Decision on MSP and increasing the price of Juice and B heavy ethanol has still not been announced at the time of writing
Expectations for 2025
We expect government decision makers to desist from taking knee jerk ac tions which have the potential of desta-bilizing sectors.
For Sugar Sector we expect revision of Minimum Selling Price for sugar in line with increase in FRP (Fair Remunerative Price) of cane. It may be worth-while to mention that last increase was done in 2018, and after that cane prices have moved up by more than 34% with no increase in MSP.
We expect sugar based ethanol products should be priced at same level as maize and grain ethanol.
For edible oil, Sector we feel the budgetary allocation under NMEO should be raised significantly if any game changing result are to be expected. At around Rs 1400 crore per annum the amount would be totally insufficient.
We expect GM in oilseed should be-come
The first half of the year saw edible oil and oilseed prices under serious pressure.
We expect GM in oilseed should become a reality for raising productivity of oilseeds.
Atul Chaturvedi, (Executive Chairman) Shree Renuka Sugars Ltd
Edible Oil/Oilseeds
The first half of the year saw edible oil and oilseed prices under serious pres-sure. Import Duty on edible olls was
negligible, and India had a good crop of Mustard and Soya. Elections en-sured import duties were not tinkered with, and no wonder both mustard and soya were available much below MSP. NAFED did
enter buying mustard at MSP but the damage had been done and oilseed farmers suffered by selling much of their produce below MSP. During second half of the year government realized that their inachon on raising import duties on edible oil was having detrimental effect
on oilseed farmers and was affecting Prime Minister’s Atmanirbharta project for gaining Self Sufficiency in Edible oils. Needless to mention our edible oil import bill has ballooned to around Rs 1.4 lakh crore and our edible oil security is heavily
compromised. Course correction happened and Government raised import duties on edible oils by 20% and also gave the required thrust to National Mission on Edible oils.
a reality for raising productivity of oilseeds, Too much debate and dither ing has been witnessed in last few decades. Time is ripe for biting the bullet, and allowing GM and other technological interventions to raise productivity which falls far short of world averages.
Being an incorrigible optimist, I am sure 2025 will bring smiles back not only on the faces of Oilseed and Cane farmers, but sugar and edible oil industry as well. If industry is healthy our farmers would be healthy as well.
Wishing the very best for 2025.
