Sweet Times Chiming the Indian Sugar Industry?
Atul Chaturvedi, Executive Chairman, Shree Renuka Sugars Limited, 0
What are the major drivers of India’s sugar industry today?
Historically speaking Sugar Sector has witnessed many ups and downs since inception. The very nature of the industry was cyclical and Boom followed Bust. During high Cane production we used to experience glut, driving down sugar prices, resulting in stakeholders coming to grief. The mills would loose money and farmer payments for cane became a casuality. With farmer payments getting delayed the next year’s crop planting suffered and sugar prices again would move northwards. It’s no wonder India was notorious for importing sugar one year and exporting next year.
No longer now!
Some recent policy interventions by the Government have ensured that the health of the Sugar sector has improved dramatically. In spite of the fact that the country has been witnessing massive increase in Cane production we do not hear of cane dues mounting or sugar prices collapsing. Some Game Changing interventions can be summarized as below.
-Incentivizing diversion of molasses and cane juice to ethanol, thereby sucking excess sugar out of the system. This policy thrust is not only good for reducing carbon footprints but for improving cash flows of mills as well as ensuring timely payments to farmers.
•Giving export sops to reduce inventory which is now no longer required. Currently no export subsidies are required as India became commercially competitive in exports.
•Monthly of release mechanism for domestic sugar to keep prices stable.
•Stipulating minimum selling price to ensure weak mills don’t come to grief by selling cheaply below cost.
The Government functionaries also became proactive in decision making and this has ensured that the health of sugar sector is not compromised.
Sugar is no longer a Cyclical industry.
"The Cane juice being produced during crushing operation is either diverted directly for Ethanol or for sugar production"
Industry is based on sugarcane which is a perishable raw material, how should the industry manage storage and transportation effectively?
The perishable nature of sugar cane has never been an issue for the sector. We have adequate capacity to crush all the cane which is produced by the farmers. As a matter of fact Industry would be more than happy if cane production in the country goes up further as it would allow operations for a longer period of time.
As far as storage is concerned we do not visualize any problem. With almost 4.5 million tons of Sugar getting sacrificed for Ethanol currently, space required for Sugar storage has not increased. Further, with robust exports during last few years the overall inventory level of the country has come down to more manageable levels. For example few years back our closing stock levels of sugar in the country used to be 14 million tons which has now reduced to 6 million tons which is sufficient for about three months consumption of the country.
Sugar transportation is quite smooth but Ethanol movement could do with some improvement. The freight
subsidy given by Oil marketing companies for far flung and deficient areas is still not sufficient and needs a relook. This has resulted in non-sugar producing areas not achieving blending targets.
Shed light on the current short comings barricading the smooth production of sugar in the country.
The last few years have seen the overcoming of major shortcoming which were plaguing the industry. For example the Recovery percentage in UP was hardly comparable with Maharashtra. The introduction of high yielding varieties created by our scientists has dramatically altered the sugar economy in UP.
The overall per hectare yield in our country has also improved significantly and we compare favorably with Brazil now.
We need to develop more disease resistant and high yielding varieties to ensure smooth production of cane. In UP this year we are witnessing Red Rot in the cane which may affect overall recovery in pockets having this disease.
Where does technology stand helping the industry tackle these challenges? How do you perceive the level of technology’s intervention in the industry?
Sugar is one sector which is at the forefront of Circular Economy. Over the years technological interventions have ensured that nothing is wasted during cane processing. The Cane juice being produced during crushing operation is either diverted directly for Ethanol or for sugar production. The resultant bagasse is used for Cogeneration and contributes to Green energy production in our country.
Molasses generated during sugar production is feed stock for Distillery. Moreover, the Press Mud generated by distillery is an excellent fertilizer.
To ensure practically zero effluent discharge, now a days Sugar Industry is upgrading to use Incineration boilers which burn all the calorific waste being generated.
With income levels rising in our country and consumers becoming more discerning Post Covid, industry needs to install refineries in the plants and also transit from selling loose sugar to packed sugar.
The tagline for our consumer pack brand Madhur is “Loose Nahin, Madhur Sahi’.
What is your anticipation regarding the future changes in the market?
Our experience tells us that the Indian farmers gets best returns vis a vis competing crops and will continue to expand acreage under cane. With Cane area not likely to come down the diversion to Ethanol would also increase.
Ethanol production via the cane route would continue to keep growing as the Government target of achieving 20 Percent blending in petrol is still a long way off. This year we expect blending to be around 12 Percent.
Going forward we feel India will no longer be a relevant Sugar Exporter as our domestic consumption would keep growing apart from ethanol diversion. Our dependence on Sugar based ethanol would be quite high as Grain Ethanol target looks to be a distant dream on account of high grain prices in our country .Sugar sector has a favorable Eco System in place whereas the Grain Sector ethanol manufacturing is likely to face strong Head winds.
What is your advice to upcoming leaders in this position while unlocking new opportunities?
India is in a sweet spot and is turning into a land of boundless opportunities. Being a man from the food industry I feel our consumption would continue to keep growing in coming years. The Consumer profile after the harrowing experience of COVID has changed dramatically and health consciousness is increasing . My simple advise to all budding entrepreneurs and leaders is to avoid taking short cuts and never compromise on quality of your product. As far as possible avoid selling food articles in loose form as we cannot guarantee safety and hygiene in loose form.
Shed light on the current short comings barricading the smooth production of sugar in the country.
The last few years have seen the overcoming of major shortcoming which were plaguing the industry. For example the Recovery percentage in UP was hardly comparable with Maharashtra. The introduction of high yielding varieties created by our scientists has dramatically altered the sugar economy in UP.
The overall per hectare yield in our country has also improved significantly and we compare favorably with Brazil now.
We need to develop more disease resistant and high yielding varieties to ensure smooth production of cane. In UP this year we are witnessing Red Rot in the cane which may affect overall recovery in pockets having this disease.
Sugar sector has a favorable Eco System in place whereas the Grain Sector ethanol manufacturing is likely to face strong Head winds
Where does technology stand helping the industry tackle these challenges? How do you perceive the level of technology’s intervention in the industry?
Sugar is one sector which is at the forefront of Circular Economy. Over the years technological interventions have ensured that nothing is wasted during cane processing. The Cane juice being produced during crushing operation is either diverted directly for Ethanol or for sugar production. The resultant bagasse is used for Cogeneration and contributes to Green energy production in our country.
Molasses generated during sugar production is feed stock for Distillery. Moreover, the Press Mud generated by distillery is an excellent fertilizer.
To ensure practically zero effluent discharge, now a days Sugar Industry is upgrading to use Incineration boilers which burn all the calorific waste being generated.
With income levels rising in our country and consumers becoming more discerning Post Covid, industry needs to install refineries in the plants and also transit from selling loose sugar to packed sugar.
The tagline for our consumer pack brand Madhur is “Loose Nahin, Madhur Sahi’.
What is your anticipation regarding the future changes in the market?
Our experience tells us that the Indian farmers gets best returns vis a vis competing crops and will continue to expand acreage under cane. With Cane area not likely to come down the diversion to Ethanol would also increase.
Ethanol production via the cane route would continue to keep growing as the Government target of achieving 20 Percent blending in petrol is still a long way off. This year we expect blending to be around 12 Percent.
Going forward we feel India will no longer be a relevant Sugar Exporter as our domestic consumption would keep growing apart from ethanol diversion. Our dependence on Sugar based ethanol would be quite high as Grain Ethanol target looks to be a distant dream on account of high grain prices in our country .Sugar sector has a favorable Eco System in place whereas the Grain Sector ethanol manufacturing is likely to face strong Head winds.
What is your advice to upcoming leaders in this position while unlocking new opportunities?
India is in a sweet spot and is turning into a land of boundless opportunities. Being a man from the food industry I feel our consumption would continue to keep growing in coming years. The Consumer profile after the harrowing experience of COVID has changed dramatically and health consciousness is increasing . My simple advise to all budding entrepreneurs and leaders is to avoid taking short cuts and never compromise on quality of your product. As far as possible avoid selling food articles in loose form as we cannot guarantee safety and hygiene in loose form.