Millers body flags concerns over decline in procurement of ethanol from cane-based distilleries
India’s sugar industry faces mounting stress as National Federation of Cooperative Sugar Mills warns that limited procurement of sugarcane-based ethanol by oil companies has left large capacities idle. With grain-based ethanol gaining priority, mills seek higher quotas, export permission, and a balanced procurement policy to protect farmer incomes and industry viability.
Kolhapur: A sharp decline in ethanol procurement from sugar cane-based distilleries has pushed the sugar industry into a crisis. According to data from the National Federation of Cooperative Sugar Mills (NFCSM), oil marketing companies (OMCs) have allocated a procurement quota of just 289 crore litres for sugarcane-based ethanol. This is a fraction of the industry’s total capacity of 838 crore litres, leaving 549 crore litres of production potential unutilised.The federation highlighted a dramatic policy shift: since the inception of Ethanol Blending Programme (EBP), the share of sugarcane-based ethanol in OMC procurement has plummeted from 90% to just 28% as of February 15. The OMCs are increasingly prioritising grain-based distilleries, which were offered a quota of 759 crore litres out of a total 1,048 crore litres for the upcoming cycle.
Harshwardhan Patil, President of the NFCSM, noted that the industry had invested nearly Rs1 lakh crore in ethanol expansion—half of which came from Maharashtra alone—based on government assurances.
“The government initially assured us they would buy 70% of our ethanol. However, sudden restrictions on exports and the shift toward grain-based fuel have left mills in a precarious position,” Patil said. “We are not against grain-based ethanol, but the government must ensure at least 50% parity for sugarcane distilleries to keep the industry afloat.”The crisis is compounded by stagnant domestic sugar consumption, which has hovered around 280 lakh metric tonnes for several years. With per capita sugar consumption declining, ethanol production is seen as the only viable way to ensure “handsome returns” for the five crore families involved in sugarcane farming.
Currently, even the allocated quotas are not being met. Of the 289 crore litres earmarked for sugarcane distilleries, OMCs have procured only 88 crore litres so far. “The crushing season is nearing its end, and mills are sitting on massive unsold stocks of ethanol produced from sugarcane juice,” Patil added.To resolve the deadlock, the federation has urged Centre to allow ethanol exports, increase procurement price for sugar cane-based ethanol, and mandate a 50-50 procurement ratio between grain and sugarcane feedstocks.
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