Sugar industry disappointed over no price hike in ethanol from cane juice and B-Heavy Molasses
The Union Cabinet raised ethanol procurement prices from C-heavy molasses to ₹57.97/litre for 2024-25 ESY but left rates unchanged for sugarcane juice and B-heavy molasses. ISMA urged a price hike, citing rising sugarcane costs and industry investments. It called for a formula linking ethanol prices to sugarcane FRP to ensure financial stability and timely farmer payments.
The Union Cabinet on Wednesday approved an increase in the procurement price for ethanol made from C-heavy molasses to Rs 57.97 per litre for the 2024-25 Ethanol Supply Year (ESY), while keeping rates unchanged for other sugarcane-based feedstocks. However, the sugar industry is disappointed over the lack of a price hike for ethanol from cane juice and B-Heavy Molasses.
With no price revision for the last two years, Indian Sugar and Bio-Energy Manufacturers Association (ISMA) urged for a comprehensive revision in ethanol prices from sugarcane juice and B-Heavy Molasses to support sector viability and ensure timely cane payments to farmers.
According to the ISMA, the sector has invested around Rs. 40,000 crore for building up of huge capacities which has doubled in last 5 years itself. Current capacity stands at around 850 crore litre and the industry is capable to increase its capacity further and can cater to achieve the blending targets as set by the Government.
Ethanol prices made from sugarcane juice and B-Heavy Molasses were last revised in 2022-23 ESY. Since the FRP of sugarcane has increased two times by a total of Rs. 350 per ton to Rs. 3,400 per ton for 2024-25 season. This increase in FRP amounts to around 11.5% which should reflect in ethanol procurement prices. Consequently, the cost of production of ethanol had increased considerably. Therefore, the price of ethanol needs to be increased from current levels to make ethanol production viable, the industry financially stable and timely farmer payments, sugar body further added.
ISMA stated that based on past determinations of ethanol prices from various sugar feedstocks, linkage between FRP of sugarcane and ethanol procurement prices should be followed by the Government for determination of ethanol procurement prices. A formulae based approach linked with FRP of sugarcane should be followed to determine price of ethanol taking in to the consideration the increase in input costs as per the past practice. Establishing a formula for the computation of ethanol prices aligned with the FRP of sugarcane will ensure the viability of the industry and timely payments for farmer welfare.
In order to boost the sugar industry, ISMA urged the government to reconsider a suitable price increase for ethanol derived from sugarcane juice and B-Heavy Molasses to support the sector’s viability and ensure timely cane payments to farmers.
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Source : Chinimandi
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