The Centre plans to notify soon on the quantity of ethanol that can be produced directly from sugarcane juice or syrup and from molasses after it has fixed a maximum diversion of 17 lakh tonnes (lt) in terms of sucrose content for the entire season (October-September). In the last season, as much as 38 lt of sugar got diverted towards ethanol, industry data show.

“The government will soon come out with a fresh notification allowing diversion of 17 lt of sugar for manufacturing of ethanol. It will be clearly mentioned how much quantity can be from juice and how much can be from molasses,” said an official source.

Industry sources said in the cycle 1 (round one) bidding by oil marketing companies, sugar mills and distilleries had agreed to supply 260 crore litres of ethanol, 130 crore litres each from direct sugarcane juice and molasses. This could have resulted in 30 lt of sugar getting diverted for ethanol if the ban had not been imposed, they said.

The decision has come amid concerns raised by industry and Maharashtra government as it could lead to piling up of sugarcane arrears since mills mostly utilise the revenue from ethanol towards clearing the dues of farmers. As sugar is produced only for 5-6 months whereas the proceeds of sales come throughout the year, mills normally delay the payment of cane farmers, though there are some exceptions.

Sugar mills’ ₹15,000-crore investment at risk after ban on cane juice for ethanol

Meet with Shah postponed

Maharashtra Deputy Chief Minister Ajit Pawar on Friday said in Nagpur that a scheduled meeting with Home Minister Amit Shah got postponed. The meeting was supposed to be attended by Chief Minister Eknath Shinde and deputy CM Devendra Fadnavis. The meeting may take place Monday or Tuesday.

Addressing the annual general meeting of Indian Sugar Mills’ Association (ISMA) in New Delhi on Friday, Union Food Secretary Sanjeev Chopra said there are three factors which have really caused the industry to flourish in the past 5-6 years in particular.

“We all are aware that it is the ethanol blending programme which saw the blending percentage going up from 1.5 per cent in 2013-14 to 12 per cent in 2022-23 (December-October). We are looking at a 15 per cent target this year and 20 per cent thereafter. This has brought in about ₹24,000 crore of revenue to the sugar mills, improved their financial position cash flows.

Improved cash flows

“Secondly, sugar exports were about 170 lakh tonnes (lt) in the past two years when sugar prices as we are aware internationally were very high and that has further improved the cash flows of the sugar industry. Currently, of course, the diversification that the industry has seen over the past few years going into co-gen power, ethanol, potash derived from molasses (PDM), compress biogas (CBG) and now green hydrogen. So these are areas where the revenues have also supplemented the original bread and butter (sugar),” Chopra said.

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