Rise in ethanol usage likely to result in fall of sugar output in India

According to the Indian sugar mills association (ISMA), India’s sugar output is forecast to decline in 2022-2023 as a higher volume of sugarcane is diverted to ethanol production even as cane production rises with increased planting acreage.

Increased diversion of domestically-produced sugarcane and ethanol towards on-road gasoline blending, as India pursues a 20% average blend rate by 2025-2026, is expected to continue to support strong import demand for ethanol for industrial use.

ISMA expects 4.5mn t of sugar to be diverted to ethanol through cane juice and B-molasses during the October 2022-September 2023 sugar season, to supply 5.45bn litres of ethanol needed to meet next year’s 12% on-road blending target.

This is higher than the 3.4mn t it estimates has been diverted to the biofuel during 2021-2022.

Sugarcane acreage is forecast to increase to 5.83mn hectare (ha) in 2022-2023, up by 4pc from 2021-2022, based on preliminary season estimates using satellite images procured in the second-half of June and input from industry stakeholders.

Sugar production before diversion to ethanol is therefore expected to rise to 40mn t, up from 39.4mn t in 2021-2022. But actual sugar output is forecast to drop to 35.5mn t from 36mn t this season, after an increased volume of the sweetener is funneled into biofuel production.