In the review conducted by the central government in December 2023, it was feared that the availability of sugar in the country would remain low, which could result in an increase increase in the sugar prices in the local market in the run-up to the general elections.
On December 7, the central government banned the production of ethanol from sugarcane juice/sugar syrup, extract and from the B Heavy Molasses.
“Due to this sudden decision, the entire sugar industry was shell shocked. Besides, this had also put a question mark on the central government’s flagship programme on ethanol production, stock of ethanol and B Heavy molasses in the factories and contracts with oil companies. Moreover, financial investment made by the factories in this sector, was also threatened,” said NFCSF.
However, on December 15, 2023, the central government gave partial relief to the sugar factories having distillation projects across the country by allowing them to use the remaining stock of ethanol and some amount of B Heavy Molasses for ethanol.
As per the amended order, maximum 17 lakh tonnes of sugar was allowed to be diverted to ethanol production.On April 24, the central government granted permission to use about 7 lakh tonnes of remaining B Heavy Molasses for ethanol.“On the advice of Food Ministry, the Petroleum Ministry has started process of allocating additional ethanol to individual distilleries on the basis of physical stock of B Heavy molasses held by them as on March 31, 2024,” said NFCSF.
It added, “Out of this, about 3.25 lakh tonnes of surplus sugar will be diverted to ethanol production, which will produce 38 crore liters of ethanol at a cost of Rs 2300 crore.”
NFCSF hopes that this decision will help in reducing the sugar stocks and consequently improve the selling rate of local sugar.
“This decision will release around Rs 700 crore stuck in the remaining stocks of B Heavy Molasses in the mills. And from the sale of 38 crore liters of ethanol produced, about Rs 2300 crore will be available to factories with distillation projects across the country so that farmers can be paid timely and fully.”said Harshvardhan Patil.
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