The Centre restricted the use of sugarcane juice and sugar syrup for ethanol production in the 2023-24 supply year, which began this month, on December 7 in order to preserve adequate sugar availability for domestic consumption and keep prices under control.
However, the government has approved the use of 'B-molasses' for ethanol production in 2023-24, which sugar industry representatives applauded. The Food Ministry advised all sugar mills and distillers in a letter to "not use sugarcane juice/sugar syrup" for ethanol production during the 2023-24 ethanol supply year (December-November).
The directive was issued in accordance with Sections 4 and 5 of the Sugar (Control) Order 1966. The Centre restricted the use of sugarcane juice and sugar syrup for ethanol production in the 2023-24 supply year, which began this month, on December 7 in order to preserve adequate sugar availability for domestic consumption and keep prices under control. However, the government has approved the use of 'B-molasses' for ethanol production in 2023-24, which sugar industry representatives applauded.
The Food Ministry advised all sugar mills and distillers in a letter to "not use sugarcane juice/sugar syrup" for ethanol production during the 2023-24 ethanol supply year (December-November).
The directive was issued in accordance with Sections 4 and 5 of the Sugar (Control) Order 1966. "Supply of ethanol from existing offers received by Oil Marketing Companies (OMCs) from B-Heavy molasses will continue," said the Food Ministry in a letter. The ministry's decision comes amid a projected decline in sugar production in the 2023-24 marketing year (October-September).
The National Federation of Cooperative Sugar Factories (NFCSF) Managing Director Pakash P Naiknavare welcomed the action, saying, "There is a huge stock of ethanol made from B-molasses lying in the country aside from contracted quantities. The letter allays the industry's fears." However, there is some uncertainty in the letter, which specifies that ethanol supply from "existing offers" received by OMCs from B-Heavy molasses will be maintained. "Will it be withdrawn after the current tender expires? There is no clarity," he said, according to PTI.
In addition, several units have been created to produce ethanol only from sugarcane juice and sugar syrup. If these units remain inactive, they will become ill, he added. "As per the order, B-molasses production shall continue against the existing offer. But it is not clear if it will continue for the next B-molasses tender,” said All India Sugar Trade Association (AISTA) Chairman Praful Vithalani. He also stated that the OMCs may not issue a fresh tender for B-molasses ethanol until the sugar situation is resolved.
The Indian Sugar Mills Association (ISMA) predicts a 9% drop in gross sugar production to 337 lakh tonnes for the 2023-24 marketing year (October-September). It has not calculated the amount of sugar diverted for ethanol production.
During the 2022-23 marketing year, India exported 61 lakh tonnes of sugar, down from a record 112 lakh tonnes the previous year. The government has not yet permitted exports for the current marketing year. To contain food inflation, the Central government has also banned exports of wheat and broken rice. It has also set the basmati rice minimum export price (MEP).