The Indian government has approved the retail price of potassium derived from molasses (PDM) at  ₹4,263 per tonne or  ₹213.5 per 50 kg bag. This will be the realisation rate for sugar mills when they sell the key raw material to fertiliser companies for making potash fertiliser and selling it in the market. The rate will be valid for the current sugar season to September 30.

Currently, the 50 kg bag of Muriate of Potash (MoP) is sold to farmers at around  ₹1,655/bag of 50 kg, which contains 60 per cent potash (K) as the government’s subsidy is ₹2.38/kg, whereas the landed cost (CFR) of imported MoP is $319/tonne (₹26,456 per tonne). However, with prices of PDM set by the government, fertiliser companies will be able to make it available to farmers between ₹350 and ₹400 per bag of 50 kg.

Can claim subsidy

Briefing media on Thursday on several measures taken by the Government to make the sugar mills not only viable as well as do not default in cane purchase payment, Union Food Secretary Sanjeev Chopra said the mutually agreed rate of PDM was facilitated by the Food and Fertiliser Ministries. Besides, fertiliser makers will be able to claim subsidy of ₹345 per tonne under the nutrient-based subsidy scheme on PDM, he said.

In the current Rabi season (October 2023-March 2024), the subsidy on potash has been fixed at ₹2.38/kg, which may be revised lower for the next kharif season as global MoP may decline.

“India (100 per cent) depends on imports for potash. This will augment potash availability in the country and a win-win for all stakeholders,” he said. Pointing out that the decision was pending for a long time due to the lack of understanding between fertiliser companies and sugar mills, he said that finally both have come to an agreement on the price.

Now, both sugar mills and fertiliser companies are discussing modalities to enter into long-term sale/purchase agreement on PDM, while some fertiliser manufacturers having their own sugar units stand to benefit from the decision.

Another revenue stream

PDM is a by-product of sugar-based ethanol plants and is derived from ash in the distilleries. About 5 lakh tonnes (lt) of potash ash is generated per year from ethanol distilleries, whereas the potential is to produce up to 10-12 lt, an official statement said.

Manufacturing and sale of PDM is going to be another revenue stream for sugar mills to add to their cash flows and also to make payments to farmers promptly. It is another initiative of the central government to reduce import dependence in the fertiliser sector, it said.

Distilleries produce a waste chemical called Spent Wash during production of ethanol which is burnt in Incineration Boiler (IB) generating ash to achieve a Zero Liquid Discharge (ZLD). This potash-rich ash can be processed to produce PDM having 14.5 per cent potash content and can be used by farmers in the field as an alternative to MoP, it said.