BC SUGAR
Saved by @AnmolNarula11

Sugar industry is poised to change drastically over the coming years from cyclical to structural.
We can fall in the footsteps of Brazil which produces ethanol and sugar equally from sugarcane and reduce the overcapacity issue of industry.
A thread

Retweet if you find it useful

 Let's first understand how a sugar factory works:
Sugarcane is crushed in a sugar factory that primarily extracts sugar syrup and fiber which is called bagasse. Bagasse is used to generate electricity, the excess power generates is then sold to the electricity companies.
Sugar syrup is then boiled to extract sugar, the syrup can be boiled up to three times to extract maximum sugar, and the residue left is known as molasses
Molasses can be further processed to generate ethanol and alcohol
The sugar syrup if being boiled twice generate B heavy molasses which has more sugar content hence can generate higher ethanol, the syrup boiled three times leaves C heavy molasses which has very low sugar content having lower ethanol yield
Ethanol can also be extracted directly from sugar syrup without making sugar, this leads to the highest ethanol yield and also fetches higher ethanol prices in the market.
Industry operation
The sugar industry is heavily regulated by the government as there are only 550 sugar factories that support the livelihood of around 11 crore people directly or indirectly.
The sugar industry has always been cyclical, impacted by the overproduction of sugar..
.. high government regulations, overcapacity issues, lower international sugar prices, etc
The cyclical nature of the industry is poised to change due to the ethanol opportunity, the government has announced an ethanol blending target of 20% to be achieved by 2025
Govt fixes the FRP (Fair remunerative price) i.e. the price sugar factories have to pay farmers for sugarcane, currently the price is fixed at Rs 2850 per tonne while some states also fix SAP (State advised price), currently SAP of Rs 3150 per tonne has been fixed by the UP govt
The government also fixes the selling price of sugar known as MSP (Minimum selling price) at which the sugar is sold in the market by the sugar companies, currently the price is fixed at Rs 31 per kg.
Price trend of ERP, SAP, and MSP over the years:
The increasing FRP and SAP prices have hurt the sugar companies as MSP has remained unchanged during the period, this in turn increases the arrears which the sugar companies are liable to pay to sugarcane farmers
Cane arrears trend:
Demand supply dynamics:
Indian sugar companies have been struggling primarily due to more supply than demand in the local market and they are unable to export as international sugar prices are lower than their cost of production, this makes export uneconomical.
There has been excess supply to the tone of 4 -5 million tonnes per year which sugar companies have to export at prices below their cost even after government subsidy.
This dynamic has been changing slowly due to lower sugar production in Brazil as cane supplies are tight due to a severe drought that’s been ravaging yields in Brazil. Cane-crushing dropped 31% in the first half of April compared to a year ago, according to industry group Unica.
The white sugar prices have gained over the past year amid supply and logistic constraints:
This has led to higher export price realization for sugar, which has now become economical for the Indian sugar industry to export its produce
Exports also have become remunerative despite cut in export subsidy by 44%
Unit Economics:
Sugar companies have three options to utilize sugar syrup:
•Option 1: Heating the syrup thrice generating C heavy molasses, yielding 11%-11.5% sugar
•Option 2: Heating the syrup twice generating B heavy molasses, yielding 9%-9.5% sugar
•Option 3: Directly producing ethanol from syrup without producing sugar
This leads to the following yield and revenue generation per tonne of sugarcane:
Ethanol prices have been fixed by the govt according to different grades of extraction. The clear choice for sugar companies is ethanol production directly from sugar syrup but ethanol production requires distillery capacity which the companies have already started to expand.
Changing dynamics:
Indian sugar industry’s rough business split is 60%-65% sugar, 20%-25% ethanol, and 10%-15% electricity generation. This is bound to change due to the higher cyclicality of sugar prices with large working capital requirements as compared to ethanol production..
..which generates higher revenue combined with low working capital requirement (OMCs payment cycle for ethanol is 1 to 2 months)
This sugar industry in Brazil (which is most advanced) diverts sugarcane production in the following manner:
The strategic shift of sugar companies to ethanol manufacturing will lead to higher realizations per tonne. The overall industry is poised well to follow the Brazil sugar industry model as bio-fuels gain more ground and acceptance in India.
Brazil produced 30 Mn tonnes of sugar, on the same lines India produced 27 Mn tonnes of sugar during the sugar season but Brazil’s ethanol production was 10 times more than India. A lot of auto companies there manufacture flex-fuel vehicles, which run on up to 100% ethanol.
The minimum ethanol blending in Brazil is 26%. These blends are called E-100 and E-26. That is, the first category consists completely of ethanol while the second has 26% ethanol blended in petrol.
The reason behind this is the policy of sugar mills in Brazil of making ethanol directly from 65% of cane juice. We have only now started making ethanol directly from cane juice.
India should implement a more “ambitious” biofuel program that will help its sugar mills to increase production of ethanol and “balance the world sugar market”, according to Eduardo Leão de Sousa, executive director of UNICA
Ethanol capacity of 1000 Cr Liters will be required to meet the 20% blending requirement which will be added by B heavy molasses capacity expansion and grain-based capacity expansion
283 crore ltr of ethanol worth about Rs 15,800 cr will be bought by petroleum marketing companies from the sugar mills during the current season. Thus, the earnings from ethanol are turning into a big source of revenue for the sugar industry for payments to be made to the farmers
The government’s policy has been welcomed by the industry and various key players have initiated capital expenditure to expand ethanol capacity.
https://t.co/ADtGvps5qN
Ethanol blending has increased from 3% in 2015 to 9% currently largely contributed by the increase in B heavy molasses ethanol processing
This thread was inspired by @varinder_bansal's excellent coverage on the sugar sector with Narendra Murkumbi
You can still watch:
https://t.co/BmHKxtl5O5
The various data points have been taken from Crisil's report on the sugar industry and various news articles.
@KirtanShahCFP @niteen_india @iam_balaji @safiranand @rdkriplani @Ajaya_buddy

More from Sugar

Varinder Bansal \U0001f1ee\U0001f1f3
Varinder Bansal 🇮🇳...
@varinder_bansal
Did You Know: Balrampur Chini

Next 2 years capacity = 2 x capacity done in last 35 years of cos existence

ethanol capacity until Jan 2020: 360 KLPD
ethanol capacity expected Nov 2022: 1050 KLPD

#JustSaying with facts
SUGAR
Varinder Bansal \U0001f1ee\U0001f1f3
Varinder Bansal 🇮🇳...
@varinder_bansal
Sugar Is New Steel !!!
SUGAR
Advertisement
Safir
Safir
@safiranand
Balrampur chini to consider buy back on 9th August. 😀😀😀😀
SUGAR
Rohit Goyal
Rohit Goyal
@goyalrohit21
@Vivek_Investor @varinder_bansal I think this sector will boom . Many oil psu has built tankers to store ethanol .Plus internationally sugar supply is affected due to brazil frost, in International market ethanol price will go up and force brazil to make more ethanol which will decrease sugar supply.

@varinder_bansal Now this depends on which type of process (c/b/juice) is used for ethanol production but eventually making ethanol will be big play so sugar will be sacrificed. And sugar stock is decreasing due to this. Now while ethanol can be made from other grains as well .

@varinder_bansal Those grains like wheat rice will also play an important role here. But major player will be sugar and mah/upmost benefited from this being highest producer.but this vehicle water issues might give a pause to party but that’s temporary not permanent.
SUGAR
Jiten Parmar
Jiten Parmar
@jitenkparmar
A thread I had done in sugar industry last year. A few things could have changed. But, I think there are huge challenges to the E20 story. Do we have underlying dynamics in place. Do read how much time it took for Brazil.

Disc: Invested in sugar only as tactical play.
SUGAR

You May Also Like

Suhas S. Hardutt
Suhas S. Hardutt
@HarduttSuhas
THE BATTLE OF TALIKOTA and the destruction of Vijaynagar (Hampi)
26 January 1565

A tale of valor, deception and decimation.

A grim reminder that if we fail to protect our heritage, it will eventually crumble under the onslaught of "forces of anarchy".
(Elaborate thread)


This decisive battle was fought between the Vijayanagara empire and the Deccan sultanates resulting in a rout of Vijayanagara and ending the last major medieval era Hindu kingdom in south India.(1)

The seeds of 1565 encounter were sown more than 250 years earlier when the forces of the Delhi Sultanate, during the time of Alauddin Khilji and later Md Bin Tughlaq swept through southern India in an expansion spree.(2)

By middle of the 14th century, facing rebellions, Tughlaq withdrew to Delhi, leaving behind 2 empires, Bahmani, which ruled the Deccan from Kalaburagi, and Vijayanagara, which ruled most south India with its capital at Vijayanagar.(3)

The Raichur Doab, between the Krishna and Tungabhadra rivers, existed as a natural boundary between these two kingdoms, with wars often breaking out over control of this territory.(4)
HISTORY
s. e. smith
s. e. smith
@sesmith
Oh are we talking about Sheryl Sandberg again? Well, your reminder that disabled feminists, LGBQT feminists, and feminists of color criticised her ‘lean in’ deal from day one. Don’t let anyone retcon that out of existence.

Like, a pretty narrow slice of feminists actually endorse and support corporate feminism, they’re just white, nondisabled, straight, cis, and noisy so their voices have a bigger reach.

So if your impression is that ‘feminism’ gave her a ‘free pass’ maybe you should question your overall impression of feminism rather than continuing to centre a handful of people as ‘thought leaders’ or whatever.

Critics within feminism have been doing this work for a long time and have been getting shat on it for about as long and I'm tired of seeing them erased. But what do I know — I am, after all, not a feminist.

But I WILL say, from my not-a-feminist perspective, that people who aren’t feminists who are criticising feminism should maybe understand the movement more deeply beyond a handful of high profile celebrity feminists.
TECH , SOCIETY
Advertisement
Jaya_Upadhyaya
Jaya_Upadhyaya
@Jayalko1
DODDA GANAPATHI, BENGALURU
#karnatakatemples

Dodda in Kannada means big. Sri Ganesha here is 18 ft tall in height and 16 ft wide. Dodda Ganesha is also known as Shakthi Ganapathi and Satya Ganapathi.

It is said that Kempe Gowda, the founder of Bengaluru, saw a rock here.


The rock had engravings of Ganesha. His sculptors cut the Ganesha murti from that single rock. Later, a shrine was built around the Ganesh murti.

It is believed that Dodda Ganapathi is the protector of Bengaluru. All auspicious events start by praying to Him.


Benne Alankara is the most famous festival here when about 100 kg of butter is coated over Ganapathi every four years and the rich prasad is offered to the worshippers.

Ganesha is also covered in cream colour and is decorated with golden laces and buttons
@GampaSD


The Dodda Ganapathi murti is believed to be still growing in size, especially towards right.

The weavers from old Bengaluru tie a coconut to their looms before starting work. When the work is completed, they break 100 coconuts here along with the one tied on the loom.
ALL
WORLD OF SANATAN DHARMA
WORLD OF SANATAN DHARM...
@world_sanatan
PETER PADUKAM - THE LEGEND OF MADURAI MEENAKSHI TEMPLE AND A BRITISH COLLECTOR.

A British Collector named Rous Peter was appointed as Collector of Madurai from 1812 to 1828.

Though a Christian by faith, he respected all faiths including Hinduism and also honored local practice


Collector Peter was the temple administrator of the Meenakshi Amman Temple and conducted all his duties with sincerity and honesty and respected the religious sentiments of all people.

Collector Rous Peter respected and treated people of all faiths equally and this noble trait

earned him the popular nickname ‘Peter Pandian'

Goddess Meenakshi Amman Temple was situated between Collector Peter's residence and office.

Everyday he used to go to the office by his horse and while crossing the temple, he got down from his horse, removed the hat and his shoes

and crossed the whole path on his foot.

Through this small gesture he expressed his reverence to the Goddess!

One day there was a heavy downpour in Madurai city and River Vaigai was in spate.

Collector was sleeping in his residence and was suddenly disturbed and woken up by

the sound of anklets and he left his bed to find out from where the sound had came.

He saw a small girl wearing pattuvastrams (silk garments) and precious ornaments and addressing him as 'Peter come this way'.
ALL
\u0936\u094d\u0930\u0940\u092e\u093e\u0932\u0940 \u0939\u093f\u0924\u0947\u0936 \u0905\u0935\u0938\u094d\u0925\u0940
श्रीमाली हितेश अवस्थी...
@HiteshAwasthi89
Statue of Equality (Ramanuja) Muchintal, Hyderabad, Telangana

The Statue of Equality is a monument in India dedicated to the 11th-century Vaishnavaite Sage Bhagavad Ramanuja, commemorating 1000 years since his birth. It was inaugurated by Prime Minister Narendra Modi ji in 2019.


In 2014, Sri Chinna Jeeyar came up with the idea to commemorate the 1000th anniversary of Sri Ramanuja's teachings by building the Statue of Equality. The statue is constructed on an estimated 34 acres in Hyderabad, India.


It consists of a 216 foot tall statue of Ramanuja and is surrounded by 108 Divyadesams (model temples) and includes an educational gallery. The project budget is 1000 crore rupees.The foundation stone for the Statue of Equality was laid by Chinna Jeeyar.


The statue was built by Aerosun Corporation in China before being shipped to India. It is made of panchaloha, a combination of gold, silver, copper, brass and titanium. The statue relies on donations to fund its construction.


The temple is located on the 27,870 square metre second floor with a 120 kg statue of Ramanuja, representing the years he lived, meant for daily worship. The 1,365 square metre third floor including a Vedic digital library and research center.
ALL