Centre’s ethanol focus positive for sugar industry, as exports likely to reduce: Ind-Ra

New Delhi, Jan 2 : The Centre’s continued focus on ethanol is a positive for the sugar industry as exports are likely to reduce in SS21 (sugar season 2021), India Ratings and Research (Ind-Ra) said in a report.
As per the report, record exports and a resilient domestic demand made sugar one of the few sectors to witness strong revenue growth in the Covid-19 affected in 1HFY21.
“The growth was also supported by an increase in the distillery revenue. The aggregate revenue of major sector entities grew 30 per cent YoY in 1HFY21…,” the report said.
“However, the growth in the sugar segment is likely to witness a moderation in 3QFY21 with a significant reduction in exports due to the delay in announcement of export subsidy mid-December 2020. While the government has extended the period of subsidy by three months to December, most large mills had exhausted their quotas by 2QFY21.” On December 16, the Cabinet Committee on Economic Affairs (CCEA) announced the long-awaited export subsidy for SS21, reducing the amount to Rs 5.8 per kg possibly due to the stretched government finances and an increase in international prices.
Besides, Ind-Ra expects sugar exports to moderate from the SS20 historical high.