GOI advises sugar mills on diversion of excess sugarcane and sugar to ethanol as long term solution for excess stock

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In a notification issued on the 13th day of 2020, Department of Food & Public Distribution advised sugar mills in India to avail loans for augmentation of their ethanol production capacity and divert excess sugarcane to fuel grade ethanol as a long term solution for addressing the problem of excess stocks. Currently, even the installed capacity for production of ethanol has not been fully utilized by sugar mills/distilleries. Therefore, the Government of India has advised sugar mills to utilize their existing capacity to produce ethanol. Sugar mills having distillation capacity should divert B-heavy molasses and sugar syrup for producing ethanol to utilize their capacity to maximum extent. Those sugar mills which do not have distillation capacity should produce B-heavy molasses and should tie up with distilleries which can produce ethanol from B-heavy molasses.

Surplus production of sugar has been continuously depressing the ex-mill prices of sugar nationwide affecting the realization on sale of sugar stocks thereby resulting financial stress in accumulation of cane price arrears of farmers.

To improve the liquidity position of sugar mills to enable them clear cane dues of farmers, the Government has taken various measures like assistance to sugar mills to facilitate export of sugar, extending buffer subsidy, extending assistance for defraying expenditure towards internal transport, freight, handling and other charges on export of sugar, extending soft loans to sugar mill through banks, extending interest subvention to sugar mills for augmentation of ethanol production capacity etc. in sugar seasons 2017-2018, 2018-2019 and current sugar season 2019-2020.

With a view to encourage sugar mills to divert excess sugarcane to produce ethanol for blending with petrol, the Government has also allowed production of ethanol from B-heavy molasses, sugarcane juice, sugar syrup and sugar and has fixed the remunerative ex-mill price of ethanol derived from C-heavy molasses @ Rs.43.75/- litre, from B heavy molasses @ Rs.54.27/litre and Rs.59.48/litre for ethanol derived from sugarcane juice/sugar/sugar syrup for ethanol season 2019-2020 (December to November)

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