Provide subsidy to sugar mills which divert 25% of sugarcane to produce ethanol – Shekhar Gaikwad

Sugar mills in the state have been facing issues with depressing sugar prices, surplus stocks and piling cane arrears. However, to make the sugar mills bail out and strengthen the financial conditions of the sugar mills the Government is emphasizing on production of ethanol.

The Central Govt. has the vision to achieve 20 percent ethanol blending with petrol by the next decade. The first milestone of 10 percent of ethanol blending with petrol is on a verge to be achieved next year as already hit 5% has been accomplished this year where 150 crore liters is currently available.

Recently, Maharashtra sugar commissioner Mr. Shekhar Gaikwad has furnished a proposal to Chief Minister Devendra Fadnavis proposing assistance of promotion of ethanol production from sugarcane juice in the state and request of support from the Government. Under the proposal, recommendation of subsidy for the ethanol production from sugarcane, sugar beet, sweet sorghum juice as well as loans for new co-operative ethanol plants, Government subsidy for the existing sugar factories.

The proposal also seeked subsidy for those cooperative sugar mills which divert sugarcane to B heavy molasses or divert up to 25% of their crushed sugar cane for manufacturing of ethanol in the entire crushing season.

According to the commissionerate of sugar Maharashtra state, sugar mills are likely to be saddled out from huge cane arrears of sugarcane farmers, struggle of selling sugar stocks with depressed prices and burden of cane arrears if the Government financially assists the sugar mills in diversifying way for production of ethanol.

Considering the current scenario, the sugar stocks will once again be at a surplus, at the end of the 2018-19 marketing year would be at a higher level at around 14.7 MMT taking into account the opening balance of 10.7 MMT as on October 1, 2018, and estimated record output of 33 MMT and domestic demand of 26 MMT as well as the export of 3 MMT. In the international market, the prices have also been quite suppressed where, the raw sugar prices have been hovering at Rs.1900/quintal whereas white sugar at Rs.2000/quintal

The commissioner put forth the estimated expenditure figures as follows for setting up new cooperative ethanol manufacturing plant and :
Ethanol Project Capacity : (500MT per Day Crushing Capacity) and Projects estimated cost expenditure of the project + GST = Total expense (Normative Project Cost): Rs 4849 lakh

Ethanol Project Capacity : (1000MT per Day Crushing Capacity) and Projects estimated cost expenditure of the project + GST = Total expense (Normative Project Cost): Rs 7611 lakh

Ethanol Project Capacity : (1500MT per Day Crushing Capacity) and Projects estimated cost expenditure of the project + GST = Total expense(Normative Project Cost): Rs 9988 lakh

Ethanol Project Capacity : (2000 MT per Day Crushing Capacity) and Projects estimated cost expenditure of the project + GST = Total expense (Normative Project Cost): Rs 12685 lakh

Below measures have been proposed by the Commissionerate in ensuring a boost for production of ethanol from sugarcane:
1) 40 per cent own funding and 60 per cent financial institution term loan.
2) Due to difficulty in obtaining 40 per cent finance from farmer members, it is recommended out of 40 per cent, 10 per cent from mill shareholders, and 30 per cent from government shareholders.
3) 60% loan amount from institution without any Govt. guarantee
4) Term loan from Govt. Should be of 15 years
5) Repayment for government shareholders has to be in a period of 15 years.

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