The National Federation of Cooperative Sugar Factories Ltd (NFCSF) has urged the government to allow the diversion of 18 lakh tonnes of surplus sugar towards ethanol production. Representatives of NFCSF recently met with Union Government officials to press this demand. They highlighted that sugar mills are facing a financial crisis due to sudden restrictions imposed by the Centre on ethanol production.

Also read: Maharashtra’s sugar crushing season extends as mills face cane cutter shortage

NFCSF said due to an extended sugar crushing season and high extract rate, there will be about 18 lakh tonnes of surplus sugar in godowns at the end of this sugar season. They argue that this surplus should be allowed to be used for ethanol production.

In December, the Indian government banned sugar mills and distilleries from using sugarcane juice or sugar syrup for ethanol production with immediate effect to ensure adequate availability of sugar for domestic consumption. Despite demands from industry players, the Centre has ruled out increasing the allocation of sugar for ethanol production beyond the 17 lakh tonnes already fixed for the entire season.

Maharashtra millers

Sugar industry players in Maharashtra, however, argue that there will be no shortage of sugarcane considering the production levels. They believe that millers will benefit, if surplus sugar is allowed to be diverted for ethanol production.

Millers in Maharashtra have submitted a memorandum to the government, stating that sugar mills will be able to pay Fair and Remunerative Price (FRP) to farmers and manage all expenses only if ethanol production from surplus sugar is allowed.

Maharashtra millers argue that  restrictions on ethanol production and low MSP will force majority of mills to close their operations permanently from the next season.