1.7 mn tn sugar to be used for ethanol: Govt
The Indian government is likely to allow the diversion of 1.7 million tonnes of sugar for ethanol production, despite recently directing mills not to use sugarcane juice and syrup for this purpose during the 2023-24 supply year. The upcoming notification will specify the quantities of ethanol that can be produced from juice and syrup. This decision follows concerns about lower sugarcane production due to erratic weather and rising sugar prices. Industry bodies like ISMA worry that this ban could impact the utilization of ethanol plants and delay payments to farmers.
The government is likely to allow diversion of 1.7million tonnes of sugar for production of ethanol a few days after it directed sugar mills and distilleries not to use sugarcane juice and syrup for ethanol production in the 2023-24 supply year, said an official person aware of the matter.
The government will come out with a fresh notification allowing diversion of 1.7 million tonnes of sugar for ethanol production. The notification will mention the amount that can be produced from juice and syrup, the official from the food ministry said.
On 7 December, the government had directed all mills and distilleries to immediately stop using sugarcane juice or sugar syrup to make ethanol during the ethanol supply year (November 2023 to October 2024 but permitted using B and C heavy molasses and foodgrains subject to a monthly review.
The government’s decision came after concerns of lower production of sugarcane due to erratic weather conditions and rising prices of sugar in the domestic market. The All India Average Consumer Wholesale Price was Rs 4142.21 per quintal on December 14 compared to Rs 3934.39 per quintal on the same day last year, according to government’s data.
Food inflation, which accounts for nearly half of the overall consumer price basket, rose to 8.70% in November, against 6.61% reported the previous month, prompting the government to take various steps to curb prices of essential food items as it gears up for the general elections in 2024.
In October, the Ministry of Commerce and Industry and the Directorate General of Foreign Trade (DGFT) amended the export restriction on sugar beyond October 31, 2023, to an indefinite period.
Industry body ISMA said the sudden ban on the use of cane juice for ethanol will have an adverse impact on capacity utilisation of mills, putting at risk their Rs 15,000 crore investment in the last three years to set up plants for green fuel. It also fears that there could be a delay in payments to sugarcane farmers.
India experienced scanty rainfall in key sugarcane-producing states such as Maharashtra and Karnataka that received 3% and 18% lower rainfall on-year. Insufficient water availability led to lower yields. As a result, sugarcane production is expected to decrease 9% in SS 2023-24 (October 2023 to September 2024), said CRISIL in a report.
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