Govt Bans Using Sugarcane Juice Or Sugar Syrup To Produce Ethanol In 2023-24 Supply Year

This step was taken by the government to maintain a sufficient supply of sugar for domestic consumption and to keep prices under control. 

At the same time, the government allowed the usage of ‘B-molasses’ for ethanol production in 2023-24.

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The Indian government banned the use of ‘sugarcane juice and sugar syrup’ to produce ethanol in the 2023-24 supply year that began this month. This step was taken by the government to maintain a sufficient supply of sugar for domestic consumption and to keep prices under control. 

At the same time, the government allowed the usage of ‘B-molasses’ for ethanol production in 2023-24. The Food Ministry issued a letter to all sugar mills and distillers and instructed them not to use sugarcane juice/sugar syrup for ethanol production during the 2023-24 supply year (December - November). The directive was issued under the Clauses 4 and 5 of the Sugar (Control) Order 1966, reported PTI. 

The ministry further said that the supply of ethanol from existing offers received by Oil Marketing Companies (OMCs) B-Heavy molasses will continue. The decision comes due to the estimated reduction in the production of sugar in the 2023-24 marketing year (October - September). 

The National Federation of Cooperative Sugar Factories (NFCSF)’s managing director, Pakash P Naiknavare, lauded the decision and said, “There is huge stock of ethanol made from B-molasses lying in the country apart from contracted quantities. The letter resolves the industry's concern. 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 Will it be withdrawn after the existing tender is over?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.”

Further, Naiknavare noted that certain units have been built only to produce ethanol from sugarcane juice and sugar syrup and will become ‘sick’ as they become unoperational. 

Praful Vithalani, chairman, All India Sugar Trade Association (AISTA), stated, “As per the order, B-molasses production shall continue against existing offer but it is not clear if it will continue for next B-molasses tender. OMCs may not come with new tender for B-molasses ethanol till sugar situation is clear.”

The Indian Sugar Mills Association (ISMA), which represents the industry, provided an estimate of 9 per cent reduction in gross sugar production at 337 lakh tonnes for the 2023-24 marketing year. Notably, the country exported 61 lakh tonnes of sugar during the 2022-23 marketing year, against a record 112 lakh tonnes in the corresponding period a year earlier. So far, the government has curbed exports for the current marketing year.