Lucknow: The Uttar Pradesh government has announced its Molasses Policy for 2025–26, increasing the quarterly molasses supply target for sugar mills from 19% to 25%. Under the new rule, mills must now release one-fourth of their reserved molasses every quarter for the production of country liquor, reports Hindustan Times.
In the previous fiscal year (2024–25), the allocation stood at 19%. Officials said the revised policy aims to ensure a steady supply of raw material to distilleries that contribute nearly 48.5% of the state’s excise revenue. The molasses year runs from November 1 to October 31.
The policy, formulated under the guidance of Minister of State for Excise and Prohibition Nitin Agarwal, seeks to guarantee the availability of safe and affordable legal country liquor while curbing the sale and consumption of illicit liquor, which has led to several deaths in the past.
For the 2025–26 molasses year, the demand for country liquor production has been projected at 105.47 lakh cusecs (in terms of B-heavy molasses). Based on an estimated total production of 585.9 lakh cusecs of B-heavy and C-heavy molasses, the state will maintain adequate reserves to meet industrial requirements. The extraction ratio between reserved and unreserved molasses has been set at 1:4.56.
According to the policy, sugar mills must supply at least 8% of their total annual reserved molasses every month and 25% each quarter. Allottees are required to lift the molasses within 30 days of receiving permission through the official portal. Failure to do so may lead to a partial or complete ban on unreserved molasses supply. Distilleries that fail to lift their allocations on time will also face action under excise regulations.
Export of molasses to other states or abroad will be allowed only after the state’s internal demand is met.
To promote ease of doing business, the policy permits storage of molasses in approved containers instead of traditional tanks. Smaller Khandsari sugar units can store molasses in small containers and transport them using GPS-enabled vehicles. A Project Monitoring Unit (PMU) will also be set up to track implementation and monitor molasses estimation.
For better revenue management, the policy has reduced permissible wastage during collection from 2% to 1.5%, while allowing a 0.5% leakage margin during transportation, up from the previous 0.1%.
Officials said the new policy balances industrial needs, revenue interests, and consumer safety, creating a transparent and efficient system for managing molasses supply across Uttar Pradesh.
