A conflict is brewing in India’s sugar sector as traditional producers of khandsari, an unrefined white sugar, mobilise to protect their industry against proposed export restrictions.
The dispute has emerged following calls from the Indian Sugar and Bio-Energy Manufacturers Association (ISMA) to curtail khandsari exports, highlighting tensions between traditional and modern sugar production methods.
The Bhartiya Heritage Association of Khandsari and Traditional Sweeteners Industry (Bhakti) has announced plans to meet with the Directorate General of Foreign Trade (DGFT) officials and Uttar Pradesh Chief Minister Yogi Adityanath to advocate for their industry’s protection.
Bhakti maintains that the traditional sector is vital for small sugarcane farmers’ survival, particularly in Uttar Pradesh and Maharashtra.
Bhakti’s Director General, Shashikant Pandhre, emphasised that khandsari units provide crucial immediate cash payments to small farmers, often exceeding the government’s Fair and Remunerative Price (FRP).
This stands in contrast to ISMA’s claims that khandsari producers typically pay below FRP rates, creating market inequities.
The scale of the dispute is highlighted by recent export figures. While ISMA exported 500,000 tonnes of sugar in the 2023-24 crop year, it now opposes khandsari exports of less than half that volume.
Bhakti points to this as contradictory, particularly as ISMA simultaneously seeks permission to export an additional 2 million tonnes of sugar while opposing the smaller traditional sector that processes less than 1 per cent of India’s total sugarcane output.
ISMA’s concerns centre on the growth of high-capacity khandsari units, particularly in Uttar Pradesh and Maharashtra.
The organisation reports that Uttar Pradesh’s 270-280 khandsari units require 10-11 million tonnes of cane annually, while Maharashtra’s 10-15 units consume 2-2.5 million tonnes.
During the October 2023 to August 2024 season, khandsari producers exported approximately 240,000 tonnes of sugar while other sugar types faced export restrictions.
The dispute underscores broader tensions in India’s evolving sugar industry, as traditional producers struggle to maintain their position against larger, modern mills.
The outcome of upcoming discussions between Bhakti and government officials could have significant implications for both sectors and the millions of farmers who depend on sugarcane cultivation for their livelihood.
