Adopting multi-feed distilleries crucial for achieving India’s ethanol blending targets: Tarun Sawhney
India’s sugar industry in the 2024-25 season faces both challenges and opportunities. The government’s approval of 1 million metric tons of sugar exports aims to help mills reduce surplus stock and support local prices. Additionally, ongoing support for ethanol blending bolsters the industry’s resilience. However, concerns remain regarding the need for a higher Minimum Selling Price (MSP) for sugar and adjustments to ethanol pricing to ensure the sector’s long-term sustainability. Tarun Sawhney, Vice Chairman & Managing Director of Triveni Engineering and Industries Ltd., emphasizes the importance of adopting multi-feed distilleries to achieve India’s ethanol blending targets.
India’s sugar industry is facing a mix of challenges and opportunities in the 2024-25 season. The government’s decision to allow sugar exports and its ongoing support for ethanol blending are helping the industry remain resilient. However, issues such as the need for a higher Minimum Selling Price (MSP) for sugar and adjustments to ethanol pricing are being raised by the industry to ensure the long-term sustainability of the sector. In an exclusive interview with ChiniMandi, Tarun Sawhney, Vice Chairman & Managing Director of Triveni Engineering and Industries Ltd., emphasized various issues and highlighted the need for multi-feed distilleries.
With many sugar mills ending operations and various bodies and research agencies providing different sugar production estimates, what do you think the sugar production will be in the ongoing 2024-25 season?
While there has been growing speculation around India’s sugar production this season, but the ground reality paints a more reassuring picture. As of March 15, India has already produced approximately 23.8 million tonnes of sugar and the industry expects to comfortably meet the revised net production estimate of 26.4 million tonnes, even after diverting 3.5 million tonnes towards ethanol. In Uttar Pradesh, where nearly 75% of mills continue to crush with improved cane recovery, the season is likely to extend into April. Additionally, special crushing in Karnataka and Tamil Nadu scheduled for June-July will further support the overall output.
In contrast, global sugar production is facing significant headwinds. The International Sugar Organization has sharply revised the global sugar deficit to 4.88 million tonnes for 2024–25—the largest in nine years. With Brazil, the world’s largest producer, experiencing dry weather and lower yield projections, global prices are climbing rapidly. This global tightness in supply is driving up futures and creating volatility.
Amidst this backdrop, India’s sugar sector stands out for its relative stability. There is no immediate concern about domestic availability or price spikes, despite international market pressures.
The sugar industry has long advocated for an increase in the Minimum Selling Price (MSP). Despite current domestic sugar prices being higher than the MSP, do you foresee a potential hike in the MSP in the near future?
An increase in the MSP for sugar is vital for the sustainability of the industry, as it has remained stagnant at INR 31 per kg since 2019. With rising production costs and the Fair and Remunerative Price (FRP) for sugarcane now at INR 340 per quintal, a revision to INR 39.14 per kg is necessary. Such a move will not only stabilize the financial health of sugar mills but also ensure fair and consistent returns for farmers, creating a balanced and resilient ecosystem.
Ethanol producers have raised concerns over the current prices being unsustainable, what according to you should be the viable price?
The recent adjustment in ethanol prices, with a marginal increase for C-Heavy Molasses (CHM) to INR 57.97 per litre from INR 56.28 per litre, is a step forward. However, the industry had hoped for a revision in prices for ethanol produced from B-Heavy Molasses (INR 60.73 per litre) and sugarcane juice-based ethanol (INR 65.61 per litre) on priority to reduce the financial stress across the value chain.
The Government’s proactive approach to advancing India’s ethanol blending ambitions—including the formation of a NITI Aayog committee to explore blending beyond the existing 20% target—signals a strong policy commitment to scaling sustainable energy solutions. To achieve these long-term targets, it is crucial for the industry to invest in expanding its capacity. A sustainable pricing model for ethanol will play an essential role.
With sugarcane FRP rising by INR 350 per tonne over the past two years to INR 3,400 per tonne for the Sugar Season 2024-25, aligning ethanol pricing with input costs will help ensure timely farmer payments and the continued viability of distilleries. To truly support the ethanol sector and meet India’s ambitious blending targets, a more comprehensive, long-term pricing policy is essential. This should include clear linkages between ethanol prices and the FRP of sugarcane, ensuring fairness, predictability, and stability across the value chain.
Considering the feedstock challenges faced by the industry last season, do you think the implementation of dual feed distilleries is becoming increasingly necessary for the sector?
Yes, adopting multi-feed distilleries that use molasses, sugarcane juice, syrup, and grains is crucial for achieving India’s ethanol blending targets. This flexibility not only helps in adapting to changing market conditions but also mitigates risks associated with market fluctuations and policy changes. Ensuring viable pricing and expanding feedstock options will further enhance production resilience and support continuous capacity growth.
With India advancing towards higher ethanol blending targets—having already reached 19.6% by January 2025—the need for scalable and adaptable distillery infrastructure is more pressing than ever. The country currently has the capacity to blend 1,700 crore litres of ethanol, with 1,500 crore litres already being utilized.[1] At Triveni Engineering & Industries Ltd. (TEIL), we are committed to supporting India’s E20 aspirations through our robust ethanol production infrastructure. Our state-of-the-art distilleries— spread across Muzaffarnagar (two facilities), Sabitgarh, Milak Narayanpur, Rani Nangal, and Shamli in Uttar Pradesh—are equipped to process various feedstocks, enhancing resilience and minimizing dependency risks. With a total capacity of 860 KLPD, we remain dedicated to India’s ethanol goals while driving economic growth, environmental stewardship, and rural empowerment.
How significant was the recent export decision for the sugar industry, and what kind of relief has it provided for the sector?
The Government’s recent decision to approve the export of 1 million tonne of sugar for the SS 2024-25 has provided a much-needed boost to the sugar industry. This progressive step aims to help mills sell surplus stock, ensure timely payments to farmers, restore financial liquidity for mills and strengthen the sugar sector.
According to media reports, by the end of the 2023-24 sugar season, more than 99.9% of cane dues had been cleared, and in the ongoing 2024-25 season, over 80% of dues had been settled as of March 5, 2025. For TEIL, this export quota translates to ~31,880 tonnes of sugar (including Sir Shadi Lal Enterprises Ltd., a subsidiary of TEIL)
What is your outlook for domestic sugar prices in the coming months?
While global sugar prices have risen, domestic sugar prices are expected to remain stable as production levels remain steady. Nearly 75% of sugar factories in UP are operational, and with improved sugarcane recovery, the crushing season is likely to extend until April. This sustained production will help ensure adequate supply, preventing significant price fluctuations in the domestic market.
However, it is important that the government increase MSP as despite an 11.5% increase in fair and remunerative price over the past two years from Rs 305 per quintal in 2022–23 to Rs 340 per quintal in 2024–25, the retail sugar prices have shown only a modest 5-7% rise during the same period.
Recently, the International Sugar Organization (ISO) increased its forecast for a larger sugar deficit in 2024-25. Do you think this will positively impact global sugar prices?
Yes, the global sugar deficit forecast for 2024-25 is expected to drive global sugar prices up. The ISO has revised its global sugar deficit to -4.88 Million Metric Tonnes (MMT), up from its November forecast of -2.51 MMT, marking a sharp shift from the 2023-24 global sugar surplus of 1.31 MMT. With supply tightening due to lower-than-expected production in major sugar-producing regions, this is the biggest global deficit in nine years, and prices are likely to reflect that. For Indian sugar producers, this creates an opportunity to benefit from stronger global prices while strengthening the domestic market’s position in the international trade landscape.
Reflecting this trend, sugar futures recently surged to their highest levels in nearly three weeks, driven by concerns over tightening global supplies such as Brazil as dry weather in top supplier Brazil resulted in some producers and traders lowering estimates for the cane harvest in the season that starts in April. Although that could threaten forecasts for the global market to finally return to a surplus in the next season. However, despite the upward movement in global prices, India’s domestic sugar market is expected to remain stable. As per industry estimates, the availability of sugar across the country remains stable and sufficient for the ongoing 2024-25 Sugar Season (SS), dispelling concerns about potential shortages or supply constraints.
India is planning for ethanol blending beyond 20 per cent. How helpful is it for sugar industry?
India’s ambition to increase ethanol blending beyond 20% by the ESY 2025-26 is a transformative step for the sugar industry, offering a stable revenue stream. As the government explores higher blending targets, the industry’s role in ethanol production will only strengthen, driving investments in capacity expansion, feedstock diversification. The NITI Aayog committee’s recent deliberations on blending beyond E20 signal a strong policy push for long-term ethanol adoption. However, sustaining this expansion requires a well-structured pricing mechanism, continued infrastructure development, and a policy framework that supports long-term industry growth.
A higher ethanol blending target will amplify the economic gains already realized through the EBP Programme, creating a more stable demand cycle for sugar mills. Over the last decade, ethanol production has facilitated Rs 92,409 crore in payments to farmers, reduced crude oil imports by 185 lakh tonnes, and saved Rs 1,08,655 crore in foreign exchange. Expanding blending beyond E20 will strengthen these advantages, reinforcing ethanol’s role as a catalyst for economic growth, energy independence, and industry-wide profitability.
At TEIL, we are enhancing our ethanol production capabilities by expanding capacity and establishing dual-feed distilleries equipped to process diverse feedstocks. Our facilities are strategically designed to support India’s ethanol ambitions, driving a more resilient, sustainable, and future-ready sugar industry.
There are reports that United States may ask India for substantial market access in ethanol, how do you think this development might influence the ethanol industry in India?
The development could have both positive and challenging consequences for India’s ethanol industry. On one hand, importing ethanol from the U.S. could help accelerate India’s Ethanol Blended Petrol (EBP) goals beyond the current target of 20% blending. However, relying on imported ethanol could defeat the purpose of reducing foreign exchange spent on crude oil imports, which is a key objective of India’s ethanol blending program. The EBP Programme aims not only to reduce dependence on fossil fuels but also to support domestic farmers by providing them with an additional revenue stream through ethanol production. If India were to import significant amounts of ethanol, it might undermine this support for domestic farmers and producers, potentially affecting their livelihoods and the overall sustainability of the domestic ethanol industry.
What is your outlook for the season 2025-26?
The outlook for the 2025-26 sugar season in India remains positive, driven by key developments across the industry. Favourable weather conditions, including a supportive monsoon. As a result, the sugarcane crop for the upcoming season is expected to be strong, with crushing operations likely to begin earlier in October 2025.
The industry expects a closing stock of 5.4MMT by the end of the 2024-25 season, ensuring adequate reserves to meet domestic demand. Additionally, the Indian Government’s decision, announced on January 20, 2025, to allow the export of 1MMT of sugar for the current season has provided significant benefits to the industry. According to ISMA, this policy has helped balance domestic sugar stocks while enhancing the financial stability of millers. The timely exports have enabled mills to expedite cane payments, directly benefiting 5.5 crore farmers and their families.
As of mid-March 2025, nearly 80% of sugarcane payments for the current season have been cleared, a notable improvement from 69% as of mid-January. Furthermore, 99.9% of cane payments for the 2023-24 season have been completed, strengthening financial stability for farmers.
An area of focus for the industry will remain the revision of the Minimum Support Price (MSP) for sugar, which is essential for maintaining the financial health of sugar mills and ensuring fair returns for farmers, contributing to a more stable and resilient sugar sector in the 2025-26 season.
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Source : ChiniMandi
