Workers harvest sugarcane in Kolhapur district of Maharashtra. File.
| Photo Credit: Reuters

The Indian Sugar and Bio-Energy Manufacturers Association (ISMA) has urged the government to increase the minimum sale price of sugar and ethanol and permit sugar exports.

The Minimum Sale Price (MSP) of sugar should be increased to ₹39.14 a kg for the sugar season 2024-2025 from ₹31 a kg that was fixed in 2019, ethanol procurement prices should be raised to ₹ 73.14 per litre (Sugarcane), ₹67.70 per litre (B-heavy Molasses), ₹ 61.20 per litre (C-heavy molasses) and export of 20 lakh tonnes of sugar should be permitted as there is an excess stock of 31.21 lakh tonnes to 32.21 lakh tonnes, the ISMA said.

M. Prabhakar Rao, president of the Association, said in a statement, “We need urgent support from the government to increase the MSP of sugar to reduce losses being faced by the industry…As such, more than 60% of the sugar is consumed by the beverages, confectionary and other food industries, who are capable of absorbing these prices.”

Present ex-mill sugar prices average ₹36.5 a kg, which falls below the calculated production cost of ₹41.66. Sugar contributes to over 85% of the industry’s revenue and the ex-mill price of sugar must be sufficient to cover cane purchase costs.

According to Deepak Ballani, Director General of ISMA, urgent policy action is imperative for the sugar sector’s stability as production costs are up, ethanol procurement prices are stagnant and the industry expects surplus sugar production.

Establishing a consistent formula for ethanol pricing based on FRP will encourage sugar mills to redirect surplus sugarcane to ethanol production. A long-term export policy will enable effective management of anticipated surpluses, he said.

With an opening stock of 84.21 lakh tonnes and gross production expected to be 333 lakh tonnes, the Association said it estimates the excess stock to be almost 32 lakh tonnes.

Supply trucks loaded with wheat wait for unloading at a port in Kandla, in the western state of Gujarat, India, May 17, 2022. REUTERS/Stringer NO RESALES. NO ARCHIVES.
| Photo Credit: Reuters

The price of wheat has jumped in the international markets after India announced a ban on the export of the staple cereal and due to the reduced production prospects in Ukraine following the Russian invasion, the UN food agency has said.

The Food and Agriculture Organisation (FAO) Price Index averaged 157.4 points in May 2022, down 0.6% from April.

The index, which tracks monthly changes in the international prices of a basket of commonly-traded food commodities, however, remained 22.8% higher than in May 2021.

The FAO Cereal Price Index averaged 173.4 points in May, up 3.7 points (2.2%) from April and as much as 39.7 points (29.7%) above its May 2021 value.

“International wheat prices rose for a fourth consecutive month, up 5.6% in May, to average 56.2% above their value last year and only 11% below the record high reached in March 2008,” it said on Friday.

“The steep increase in wheat prices was in response to an export ban announced by India amidst concerns over crop conditions in several leading exporting countries, as well as reduced production prospects in Ukraine because of the war,” it said.

In contrast, international coarse grain prices declined by 2.1% in May but remained 18.1% above their value a year ago.

Slightly improved crop conditions in the United States of America, seasonal supplies in Argentina and the imminent start of Brazil’s main maize harvest led maize prices to decline by 3.0%, however, they remained 12.9 % above their level of May 2021, it said.

International rice prices increased for the fifth successive month in May.

Quotations strengthened in all the major market segments, but monthly increases were least pronounced (2.6%) for the most widely traded Indica varieties, amid ample supplies, especially in India, it said.

The FAO Sugar Price Index declined by 1.1% from April, as a bumper crop in India buoyed global availability prospects.

The weakening of the Brazilian real against the US dollar, along with lower ethanol prices resulted in further downward pressure on world sugar prices.

“The FAO Sugar Price Index averaged 120.3 points in May, down 1.3 points (1.1%) from April, marking the first decline after sharp increases registered in the previous two months,” the agency said.

“The recent monthly decline in international sugar price quotations was triggered by limited global import demand and good global availability prospects, mostly stemming from a bumper crop in India,” it said.

Last month, India announced that it was banning wheat exports in a bid to check high prices amid concerns of wheat output being hit by the scorching heat wave.

Wheat exports were allowed on the basis of permission granted by the Indian government to other countries to meet their food security needs and based on the request of their governments.

Minister of State for External Affairs V. Muraleedharan had told the Ministerial Meeting on ‘Global Food Security Call to Action’ chaired by the US Secretary of State Antony Blinken under the US Presidency of the UN Security Council for the month of May that India is “committed to ensuring that such adverse impact on food security is effectively mitigated and the vulnerable cushioned against sudden changes in the global market. In order to manage our own overall food security and support the needs of neighbouring and other vulnerable developing countries, we have announced some measures regarding wheat exports on 13 May 2022.

“Let me make it clear that these measures allow for export on the basis of approvals to those countries who are required to meet their food security demands. This will be done on the request from the concerned governments. Such a policy will ensure that we will truly respond to those who are most in need,” he added, emphasising that India will play its due role in advancing global food security.