Informist, Thursday, Apr 25, 2024

NEW DELHI – The government has allowed sugar mills to produce ethanol from 700,000 tn of B-heavy molasses lying in inventory as of Mar 31, the National Federation of Cooperative Sugar Factories said today. The decision comes after the federation informed the government on Feb 24 that 700,000 tn of B-heavy molasses was lying unutilised in sugar factories across the country.

The 700,000 tn of B-heavy molasses translates into about 325,000 tn of surplus sugar, which has now been allowed to be diverted towards ethanol production, the federation said in a press release. This surplus sugar is likely to produce 380 mln ltr of ethanol at 23 bln rupees in the ongoing ethanol supply year ending in October, it said.

The government decision will release around 7 bln rupees stuck in the remaining stocks of B-heavy molasses with the mills, the federation President Harshvardhan Patil said. "This decision will help in reducing the sugar stocks and consequently improve the selling rate of local sugar," he said.

Informist had reported on Wednesday, quoting a senior official from the Department of Food and Public Distribution, that the government has allowed the diversion of an additional amount of B-heavy molasses lying with mills as of Mar 31 for the production of ethanol in the ongoing season. This, in effect, will ease the 1.7-mln-tn cap imposed on mills for sugar diversion for ethanol production.

The government in December capped sugar diversion for ethanol production at 1.7 mln tn amid concerns about lower sugar production in the current season ending September. It has also imposed an indefinite restriction on sugar exports.

However, following an upward revision of sugar production estimates, the industry has been clamouring for 1.8 mln tn of additional sugar diversion for ethanol and exports this season. As of Apr 15, sugar production by mills across the country was 31.1 mln tn, down 0.5% from a year ago, according to the Indian Sugar & Bio-energy Manufacturers Association. With an opening stock of 5.6 mln tn and sugar output at 32.0 mln tn, the association has pegged total sugar availability in 2023-24 at 37.0 mln tn. With consumption demand at 28.5 mln tn, a healthy closing stock of 9.1 mln tn can be anticipated by the end of the season, the association had said.

The move by the government underscores the optimism surrounding adequate availability of sugar in domestic markets this season. This also gives the government leeway to allow more sugar for producing ethanol as it aims to achieve the 20% blending of the biofuel with petrol by 2025-26 (Nov-Oct). End

Reported by Sayantan Sarkar

Edited by Saji George Titus

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