Various measures taken by government to stabilize sugar sector and sugar prices


PIB, New Delhi: Excess production during last three sugar seasons 2018-19, 2019-20 and 2020-21 has been continuously depressing the ex-mill price of sugar. This has adversely affected the realization on sale of sugar resulting in accumulation of cane price arrears of farmers for these sugar seasons. In order to maintain demand supply balance, to stabilize sugar prices and to improve liquidity position of sugar mills thereby enabling them to clear cane price dues of farmers, the Government took following measures for sugar season 2020-21 (October to September) in addition to the ongoing measures taken during previous sugar seasons:

  • Government vide notification dated 29.12.2020 notified scheme for providing assistance to sugar mills for expenses on export of 60 LMT of sugar to the extent of Maximum Admissible Export Quantity (MAEQ) for sugar season 2020-21. Under the scheme, Government has provided a lump sum assistance @ Rs 6000/MT (which was reduced to Rs.4000/LMT w.e.f. 20.05.2021) to sugar mills to facilitate export in sugar season 2020-21 for which an estimated expenditure of Rs 3500 Cr would be borne by Govt. Due to this, against the total 60 LMT of sugar; 70 LMT of sugar was exported in sugar season 2020-21, highest for any season.
  • The Government has allowed production of ethanol from sugar/sugar syrup in addition to sugarcane juice. Further with a view to support sugar sector and in the interest of sugarcane farmers, the Government has fixed the remunerative ex-mill price of ethanol derived from C- heavy molasses @Rs.46.66/litre; from B-heavy molasses @ R.59.08/litre and @Rs.63.45/litre for the ethanol derived from sugarcane juice/sugar/sugar syrup for ethanol supply year 2021-22 (December, 2021 – November, 2022). To increase production of fuel grade ethanol, Government. is also encouraging distilleries to produce ethanol from maize & rice available with FCI.

As a result of measures taken by Government as on 09.12.2021, about Rs.88889 crore have been paid to farmers out of total cane price dues of about Rs.92880 crore for sugar season 2020-21, thus, 95% cane dues have been cleared.

  • Production of Hand-sanitizer:
  • Keeping in view the crucial role of sanitizer in the fight against COVID-19 and on the recommendation of CoS, DFPD coordinated with industry and State Governments to encourage the industry to produce hand sanitizer.
  • Prior to Covid-19, the annual sale of hand sanitizers was only about 10 lakh litre per annum and was mainly used in the hospitals.
  • With the collective efforts of DFPD & State Governments, 912 distilleries/independent manufacturers were accorded permissions to produce hand sanitizer.
  • Installed capacity for production of hand sanitizer increased substantially to 30 lakh litre per day. As on 30.11.2021, more than 5 crore litre of hand sanitizer has been produced.
  • Keeping in view the sufficient availability of hand sanitizer at reasonable price in the country, export of sanitizer has also been allowed.
  • Diversion of excess sugar to ethanol and Augmentation of Ethanol Production Capacity under Ethanol Blended with Petrol (EBP) Programme:
  • Government has fixed target of 10% blending of fuel grade ethanol with petrol by 2022 & 20% blending by 2025. To achieve blending targets, Government is encouraging sugar mills and distilleries to enhance their distillation capacities for which Government is facilitating them to avail loans from banks for which interest subvention @ 6% or 50% of the interest charged by the banks whichever is lower is being borne by Government.
  • In year 2013, ethanol distillation capacity of molasses based distilleries was 215 cr litres. However, in past 7 ½ years due to the policy changes made by the Government, the capacity of molasses based distilleries have been doubled and are currently at 519 cr litres. Supply of ethanol to OMCs was only 38 crore litres with blending levels of only 1.53 % in ethanol supply year (ESY) 2013-14. Production of fuel grade ethanol and its supply to OMCs has increased by about 8 times from 2013-14 to 2020-21; about 302.30 Cr ltrs ethanol have been supplied to OMCs for blending thereby achieving 8.10% blending in 2020-21. The details of Ethanol supplied for blending and percentage of blending achieved since 2013-14 is as under:-
Ethanol Supply Year

(December – November)

Qty Supplied (crore litres)Blending Percentage


381.53 %
2014-1567.42.33 %


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