Sugar Industry suffering from the Covid-19 effect got a major boost from the govt. announcement of a ₹3500 crore subsidy for the year 2020-21. The export demand has been mostly bogged down by the Covid-19 disruptions. To bring the export to the pre-Covid-19 level, the decision was being anticipated in many sections of the industries. The working margins of the sugar industry are expected to grow by 10.5-11.5% in the current monetary year. This can be attributed to a no. of factors like consistent domestic demand and higher commitment from ethanol buyers. Although the subsidy announced for SS₂₁ is comparatively lower than SS₂₀ @ ₹ 10.4 per kilo, yet the move is expected to help homegrown mills to cover the cost of production. The export will be feasible in such a mill-friendly subsidy scheme. The total export forecast is expected to be in the range of 5-5.5 million tons when compared to 5.7 million ton in SS₂₀. The result is also because of the less timeframe accessible for exports. The window of opportunity is very small as most of the exports need to take place by April 2021. After it, the sugar trade with Brazil is expected to resume adding up to 30-40% of worldwide sugar creation.

High consumption of SS₂₁ sugar will bolster the domestic production to approximately 25.5million tons to 26 million tons. The higher production is also because of robust demand from the industries that represent almost 60% of the total demand. Moreover, the rise in ethanol prices from 1st December 2020 is also expected to result in a diversion of cane towards ethanol production. The price rise will also cut down the production of SS₂₁ sugar by 2 million tons compared to 0.8 million tons in SS₂₀.

All the above-mentioned factors will help in keeping the inventory level for all the mills almost flattish in SS₂₁ sugar despite the fact that sugar production increased to 30-31 million tons from 27 million tons in SS₂₀ sugar. The shortfall in domestic demands can be covered by exporting the surplus amount of sugar produced.

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