What Might The Future Hold for India’s Sugarcane Industry?

A recent analytics of S&P Global Platts, the leading independent provider of information, benchmark prices and analytics for the energy and commodities markets based on London, shown that focus on the ethanol could be possible to fix the Indian sugar glut, and the forecast of sugar production in the India’s sugarcane industry, including the factors that why India is still remaining a strong exporter.

The S&P Global Platts’s analyst, detail that India has reached a new production threshold above consumption over the past couple of years. These are because, the government has fixed sugarcane prices to support farmers’ revenues, moreover, when combined with fixed minimum domestic sugar prices well above international levels, and Indian millers are bound by law to crush all the sugarcane in their area of influence as well as the introduction of higher yielding sugarcane varieties in some key producing states has taken production in those regions to fresh heights.

Ethanol Demand and Blending Rate, source by S&P Global Platts
Sugar Production and Consumption, source by S&P Global Platts

As long as these three factors remain in play, sugar production will most likely remain above 30 million mt, unless severely adverse weather conditions hit agricultural yields. For 2020-21, everyone is expecting a recovery in sugar production to above 30 million mt.

Could ethanol be the solution to the sugar glut?. Platts Analytics forecasts total sugar consumption at 25.5 million mt in 2019-20, meaning the country should produce another surplus of roughly 1 million mt of sugar to be added on top of the massive ending stocks of 15 million mt at the end of September. If we assume that, under normal weather conditions, the new production average could be around 31 million-32 million mt a year, we will continue to add around 5 million mt of exportable surplus after 2020. This surplus should shrink going forward as sugar consumption grows, but it is safe to expect that India could remain a net exporter over the next five years. However, exporters would need government support to be competitive on the international market and really manage to export the forecast surplus because Indian production costs are well above current market prices.

So, even though the sugarcane industry is generally supportive of ethanol and believes it could help resolve the sugar surplus, in 2020 the impact of ethanol will remain fairly limited. At Platts Analytics we expect the blending rate to increase from 5.3% to 5.7% in 2020 or 2.6 billion liters, corresponding to no more than 600,000 mt of sugar equivalent being diverted to the renewable fuel. However, we must flag up the fact that some industry participants believe diversion to ethanol could be already as high as 1 million mt of sugar equivalent in 2019-20.

Although, today ethanol is not yet a real game changer in terms of sucrose diversion as it has become in Brazil. Nonetheless, there are reports the Indian government might be aiming to increase fuel ethanol capacity to be able to divert as much as 5 million mt in sugar equivalent to ethanol, when needed. At the moment this sounds a lot like wishful thinking but in India, we have learned that there is no such thing as impossible.

vulkan vegas, vulkan casino, vulkan vegas casino, vulkan vegas login, vulkan vegas deutschland, vulkan vegas bonus code, vulkan vegas promo code, vulkan vegas österreich, vulkan vegas erfahrung, vulkan vegas bonus code 50 freispiele, 1win, 1 win, 1win az, 1win giriş, 1win aviator, 1 win az, 1win azerbaycan, 1win yukle, pin up, pinup, pin up casino, pin-up, pinup az, pin-up casino giriş, pin-up casino, pin-up kazino, pin up azerbaycan, pin up az, mostbet, mostbet uz, mostbet skachat, mostbet apk, mostbet uz kirish, mostbet online, mostbet casino, mostbet o'ynash, mostbet uz online, most bet, mostbet, mostbet az, mostbet giriş, mostbet yukle, mostbet indir, mostbet aviator, mostbet casino, mostbet azerbaycan, mostbet yükle, mostbet qeydiyyat