Sugar is a highly regulated industry where every thing is regulated and controlled by the Governemnt and if some thing is presently out of purview than government can bring them under control at any time. Government controlls
input cost, Selling price, how much inventory you can hold, how much you can sell, how much you can export etc etc…
We should be very circumspective while calculating super profits for sugar mill. Government will never like/allow sugar mills to make money. Political parties want to serve their vote bank by providing additonal benefits to farmers who are their largest vote bank. If sugar mill are making extra ordinary profits then government can increase the FRP on sugar cane price even from retrospective date also …
Its very difficult to predict with certainity 2 to 3 year scenario in an industry which is highly regulated…
In my opinion Ethanol push was also mainly to absorb the excess inventory of Sugar so that cane arrears of farmers can be cleared easily… now the scenario has entirely changed and we have reached from excess sugar to sugar deficit and in my opinion ethanol has never been a viable proposition.
India is a water starved nation and Sugar can is a highly water guzzling crop and it hardly makes any sense to grow excess sugar cane and divert it for Fuels…
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