The Centre on Thursday banned the use of ‘sugacane juice and sugar syrup’ for ethanol production in the 2023-24 supply year that started this month, in order to maintain adequate sugar availability for domestic consumption and to keep prices under check.
However, the government has allowed use of ‘B-molasses’ for ethanol production in 2023-24, a move which sugar industry bodies welcomed.
In a letter issued to all sugar mills and distillers, the Food Ministry directed them “not to use sugarcane juice /sugar syrup” for ethanol production during the 2023-24 ethanol supply year (December-November).
The directive was issued as per clause 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,” Food ministry said in the letter.
The decision by the ministry comes in the backdrop of estimated fall in sugar production in 2023-24 marketing year (October-September).
However, there are some ambiguity in the letter that states supply of ethanol from “existing offers” received by OMCs from B-Heavy molasses will continue. “Will it be withdrawn after the existing tender is over? There is no clarity,” he told PTI.
Also, some units have been built for making ethanol from sugarcane juice and sugar syrup alone. These units will become sick if they remain unoperational, he added.
He also said the OMCs may not come with new tender for B-molasses ethanol till sugar situation is clear.
Industry body Indian Sugar Mills Association (ISMA) has projected a 9 per cent fall in gross sugar production at 337 lakh tonnes for the 2023-24 marketing year starting (October-September). It has not estimated the diversion of sugar for ethanol production.
India exported 61 lakh tonnes of sugar during the 2022-23 marketing year, as against a record 112 lakh tonnes in the previous year. The government has not yet allowed exports for this marketing year.
To contain food inflation, the Central government has also banned exports of wheat and broken rice. It has also fixed minimum export price (MEP) for basmati rice.
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