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Indian Sugar Industry:

Policy, Crop & Ethanol


DR. AMIN CONTROLLERS PRIVATE LIMITED
- SIDDHARTH R AMIN
D U BA I S U GA R CO N FER ENCE 2 0 1 9
Why does the Sugar Industry warrant
Government Intervention in India?

Half a million direct employment in


50 Millions mills Indirect employment of many million in
farmers ancillary support industries

Revenue for Government


March ' 94 0% Import duty under OGL

Key 15th Jan 1997


28th April 1998
Export promotion act repealed - Means any one can export now with APEDA certificate
and export release order from ministry
5% Import Duty + Rs. 850/tn CVD (Both Whites + Raws)

Government 14th Jan 1999


Nov. 1999
20% Import Duty + Rs. 850/tn CVD (Both Whites + Raws)
25% Import duty + No CVD + 10% surcharge (Both Whites + Raws)

Interventions 30th Dec 1999


9th Feb 2000
40% Import duty + No CVD + 10% surcharge (Both Whites + Raws)
60% Import duty + No CVD + 10% surcharge (Both Whites + Raws)

in Policy –
21st March 2003 Advance License Scheme under Ton 4 Ton launched
31st July 2007 Export without Release order allowed
1st March 2008 60% Import duty + Rs. 950/tn CVD + 3% Ed Cess on CVD (Both Whites + Raws)

1994 to 2012 29th April 2008


1st Jan 2009
Advance License Scheme under Ton for Ton withdrawn
Export thru Release order brought back as mechanism
17th April 2009 0% Import duty + Rs. 950/tn CVD + 3% Ed Cess on CVD (Both Whites + Raws)
Concept of SMP was replaced with MSp - Amending the Sugarcane (Control) Order, of
22nd October 2009 1966
Oct 2010 to May
2012 Export allowed through pre allocated quantity to mill thru Release order
11th May 2012 Export allowed thru DGFT registration of contracts
30th June 2012 60% Import duty + Rs. 950/tn CVD + 3% Ed Cess on CVD (Both Whites + Raws)
13th July 2012 10% Import duty + Rs. 950/tn CVD + 3% Ed Cess on CVD (Both Whites + Raws)
Discontinued levy Obligation based recommendation of the committee head by Dr C
Rangarajan on the deregulation of the sugar Industry. Other recommendations relating
to Cane Area reservation, Minimum distance criteria, adoption of the cane price
formula, amongst others, were left to the state governments for adoption and
September 2012 implementation.
Central Government to subsidies the participating state government towards supply of

Key
sugar to section of population below the poverty line - under the National food Security
22nd April 2013 Act 2013
8th July 2013 15% Import duty + Rs. 950/tn CVD + 3% Ed Cess on CVD (Both Whites + Raws)

Government 21st Aug 2014


30th April 2014
30th April 2014
25% Import duty + Rs. 950/tn CVD + 3% Ed Cess on CVD (Both Whites + Raws)
40% Import duty + Rs. 950/tn CVD + 3% Ed Cess on CVD (Both Whites + Raws)
Raw Sugar Import under DFIA banned

Interventions 7th September 2015 No more requirement of APEDA registration for Export
2nd December 2015 Performance based production subsidy
16th June 2016 20% Export duty on white + Raw sugar

in Policy – 1st June 2017


Revised the scheme for subsidy to participating state for supplies to sections of the
population under the poverty line, as covered under the AAY (Antyadaya Anna Yojana)

2013 to 2018 12th September


2016
Production based subsidy applicable for 2015-16 season till 19th may 2016, applicable
per quintal of cane crushed contingent on achieving targeted export and supply of
ethanol
13th April 2017 500k MTs Raw sugar import under TRQ
10th July 2017 50% Import duty + GST (Both Whites + Raws)
12th September
2017 300k MTs Raw sugar import under TRQ
MIEQ was announced for 2 Million MT - order amended on 9th May 2018 applicable for
28th March 2018 2017-18 sugar season
Under Clause of Essential Commodities Act 1955, Notified Sugar Price (Control) order
7th June 2018 and fixed the minimum selling price at Rs. 29.00 per Kg for sale by sugar mills
1st July 2018 Created a buffer stock for one year w.e.f 1st July 2018
28th September MIEQ was announced for 5 Million MT - Superceeding the previous MIEQ this order is
2018 valid till 30th September 2019
5th October 2018 Scheme to provide financial assistance for cane crushed during 2018-19 season
Scheme to provide financial assistance to defray internal transport, freight, handling and
5th October 2018 other charges valid till 30th September 2019 - only to facilitate export of sugar
300 10.10%

10.00%
250
9.90%

Cane Price

FRP in Rs per quintal

Basic Recovery Level


200 9.80%

The Fair & 9.70%


Remunerative Price 150
(FRP) of sugarcane 9.60%
payable by sugar
factories for each 100 9.50%
sugar season from
2009-10 to 2018- 9.40%
19 is tabulated 50
9.30%

0 9.20%
2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19
Source: Department of Food and Public Distribution
(DFPD) – Ministry of Consumer Affair ,Food & Public Sugar Season
Distribution - Government of India
Sugar 2017-18

Balance
Particulars 2013-14 2014-15 2015-16 2016-17
(P)

Sheet India Carry- over stocks with sugar mills


from Previous season
91.09 72.13 90.00 77.10 39.37

Production of Sugar 245.54 284.63 251.21 202.27 321.96


Sugar Balance Sheet
since 2012-13 Sugar Imports 1.05 - - 5.00 -
Season and onwards:
Estimated Total availability 337.68 356.76 341.21 284.37 361.33
(quantity in 100000
MT) Dispatches from mills for Internal
243.00 256.00 247.61 245.00 252.00
consumption

Exports against ALS/AAS obligation


22.55 12.00 16.50 - 6.19
and OGL

Total Estimated releases/Dispatches 265.55 268.00 264.11 245.00 258.19

Estimated Closing Stocks with sugar


72.13 88.76* 77.10 39.37 103.14
mills at the end of season
Source: Department of Food and Public Distribution – *closing stock of one season is differ from opening stock of other season to account for damaged / wet sugar, sugar
Ministry of Consumer Affair ,Food & Public Distribution sold against court order.
(DFPD) - Government of India (P) – Provisional
Amount in thousand crores
90,000.00 12.00%

80,000.00

Cane Price 70,000.00


9.92%
8.19%
10.00%

Arrears
60,000.00 8.00%

50,000.00
6.00%
40,000.00

30,000.00 4.00%
3.99%
20,000.00
2.58% 2.00%
10,000.00

0.00 0.00%
2017-18 2016-17 2015-16 2014-15
Total Price Payable 85,345.02 57,870.14 60,380.52 66,003.00
Total Price Paid 76,878.38 56,374.39 57,968.45 60,596.76
Arrears 8,466.64 1,495.75 2,412.07 5,406.24
% of arrears of Price
Source: Department of Food and Public 9.92% 2.58% 3.99% 8.19%
Distribution – Ministry of Consumer Payable
Affair ,Food & Public Distribution -
(DFPD) Government of India
Total Price Payable Total Price Paid Arrears % of arrears of Price Payable
Date/Year Event
Current 28th March MIEQ was announced for 2 Million MT - order amended on
Policy 2018 9th May 2018 applicable for 2017-18 sugar season

Initiatives Under Clause of Essential Commodities Act 1955, Notified


Sugar Price (Control) order and fixed the minimum selling

Sugar 7th June 2018 price at Rs. 29.00 per Kg for sale by sugar mills

Season
1st July 2018 Created a buffer stock for one year w.e.f 1st July 2018
28th
September MIEQ was announced for 5 Million MT - Superseding the
2018-19 2018
5th October
previous MIEQ this order is valid till 30th September 2019
Scheme to provide financial assistance for cane crushed
2018 during 2018-19 season

Scheme to provide financial assistance to defray internal


5th October transport, freight, handling and other charges valid till 30th
2018 September 2019 - only to facilitate export of sugar
Ethanol a) Government decided to launch Ethanol Blending Program in
January 2003 with blending target of 5%.
Blending b) 20th September 2006, it directed the OMC (Oil Marketing
Companies) sell 5% Ethanol Blended, petrol.
Initiative c)
d)
The government has notified administered price since 2014
Scaled up the blending targets of ethanol with motor spirits from
5% to 10%
e) Grant soft loan through banks for setting up new distilleries, or
expansion of existing distilleries.
f) Fixed remunerative price for ethanol derived from C – heavy
molasses at INR 43.46/lt
g) Fixed a higher price for ethanol derived from B heavy molasses at
INR 52.43 per/lt
h) Fixed a even higher price for ethanol derived from 100 % sugar
cane juice, and not produce any sugar INR 59.13 per/lt
Projected Supply Demand & Deficit of
Ethanol in India
6000 35

Ethanol 26% 28% 29% 30


5000 25%
23% 25
4000 21%

Blending
20
3000
15
2000
10

Initiative 1000
0
2016-17 2017-18 2018-19 2019-20 2020-21 2020-21
5
0

Supply Blending Total Demand Deficit % Deficit


Data Table
Year 2016-17 2017-18 2018-19 2019-20 2020-21 2020-21
Supply (A) 2993 3089 3187 3289 3395 3503
(i)Blending 1532 1664 1803 1952 2109 2283
(ii)Industrial 1252 1296 1342 1389 1437 1487
Ethanol Demand is projected
using the expected growth in (iii)Potable 1030 1061 1093 1126 1159 1194
petrol demand. (i+ii+iii) Total
3815 4021 4238 4466 4706 4964
Demand (B)
All quantities are in Million Litres
Deficit (B-A) 822 933 1051 1177 1311 1461
Industries
(Development
Sugar Industry Sugar Factory and Regulation) Sugar Control
(Protection) Act Control Act Act Order

Conclusion
1932 1934 1938 1950 1951 1955 1966 1987

Sugar Cane Act Sugar cane Essential Jute Packing


(Control) Order Commodities Materials Act
Act
Thank You