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India's sugar exports jumped 57 per cent to 109.8 lakh tonnes during 2021-22 marketing year ending September, making the country world’s 2nd largest exporter of sugar, the food ministry said on Wednesday said.

India's sugar exports stood at 70 lakh tonnes in 2020-21 marketing year, 59 lakh tonnes in 2019-20 and 38 lakh tonnes in 2018-19.

"Supportive international prices and Indian government policy led to this feat of Indian sugar industry. These exports earned foreign currency of about Rs 40,000 crore for the country," the ministry said in a statement, adding that timely government interventions in the past five years brought the sector out of financial distress.

India achieved the highest exports of about 109.8 lakh tonnes, without any financial assistance from the government.

The surge in sugar imports resulted in foreign currency inflow worth about Rs 40,000 crore into the country, it added.

The country also produced a record of more than 5,000 lakh tonnes sugarcane during the same period, out of which about 3,574 lakh tonnes were crushed by sugar mills to produce about 394 lakh tones of sugar (sucrose).

Out of this, 35 lakh tonnes of sugar was diverted to ethanol production and 359 lakh tonnes of sugar was produced by sugar mills, the food ministry said.

India emerged as the world's largest producer and consumer of sugar due to record sugar production, it claimed.

Sugarcane arrears to farmers stood at only Rs 6,000 crore at the end of 2021-22 marketing year (October-September) as mills have already paid Rs 1.12 lakh crore to farmers out of total payable amount of Rs 1.18 lakh crore. This was done without any financial assistance (subsidy) from the central government, the ministry said.

"Thus, cane dues at the end of sugar season are less than Rs 6,000 crore indicating that 95 per cent of cane dues have already been cleared. It is also noteworthy that for 2020-21, more than 99.9 per cent cane dues are cleared," it added.

Earlier this year, the government allowed exports of 100 lakh tonnes of sugar and then later permitted another 12 lakh tonnes. This took the total export quota for 2021-22 to 112 lakh tonnes. Mills were able to ship 109.8 lakh tonnes.

The government has been encouraging sugar mills to divert sugar to ethanol and export surplus sugar so that mills can pay farmers on time.

"Growth of ethanol as biofuel sector in last 5 years has amply supported the sugar sector as use of sugar to ethanol has led to better financial positions of sugar mills due to faster payments, reduced working capital requirements and less blockage of funds due to less surplus sugar with mills," the statement said.

During 2021-22, the ministry said that mills/distilleries earned revenue of about Rs 18,000 crore from sale of ethanol, which has also played its role in early clearance of cane dues of farmers.

Ethanol production capacity of molasses/sugar-based distilleries has increased to 605 crore litres per annum and the progress is still continuing to meet targets of 20 per cent blending by 2025 under Ethanol Blending with Petrol (EBP) Programme.

"In new season, the diversion of sugar to ethanol is expected to increase from 35 lakh tonnes to 50 lakh tonnes, which would generate revenue for sugar mills amounting to about Rs 25,000 crore," the ministry projected.

"The season has proven to be a watershed season for Indian sugar sector. All records of sugarcane production, sugar production, sugar exports, cane procured, cane dues paid and ethanol production were made during the season," the ministry said.

The closing stock of sugar stood at 60 lakh tonnes which is essential to meet domestic requirements for 2.5 months.