WISMA urges govt to revise sugar MSP to Rs 3,700 per quintal to compensate losses due to huge reduction in ethanol production

In response to the recent government directive restricting the use of sugarcane juice for ethanol production, the West Indian Sugar Mills Association (WISMA) has urged the government to reconsider its decision.

The government in a notification released on December 7, 2023, directed to all sugar mills and distilleries not to use Sugarcane Juice/Sugar Syrup for Ethanol in ESY 2023-24 with immediate effect. Supply of ethanol from existing offers received by OMCs from B-Heavy molasses will continue.

In a letter addressed to Prime Minister Narendra Modi, WISMA expresses deep concerns over the impact of this decision on the sugar industry and the ambitious Ethanol Blending Programme (EBP).

WISMA’s letter outlines key requests:

1) Allow ethanol from Sugarcane Juice/ Syrup for the current sugar season as already Oil Marketing Companies (OMCs) have accepted our offers for supply of ethanol manufacturing from Sugarcane Juice/ Syrup for first two quarters i.e. up to April 2024.
2) Sugar mills have already started production of ethanol from Sugarcane Juice/ Syrup from 1st November 2023 and have supplied partly quantity also to OMCS. Mills have stocks of Ethanol as well as Rectified Spirit (RS) from Sugarcane Juice/ Syrup that total quantity should be accepted by OMCS till the end of current crushing season.
3)  Due to suspension of ethanol manufacturing from Sugarcane Juice/ Syrup, the expanded as well as newly established Distillery Plant capacities will remain idle due to which sugar industry will have to bear huge losses due to un-utilized capacities, hence interest burden of this suspended period should be 100 % compensated by Government of India on the Term Loan availed for this purpose.
4) The re-structuring and re-scheduling of Term Loan should be considered by lending banks for which necessary directives should be issued by RBI.
5) The interest subvention scheme of Government of India should be extended for the suspended period of restrictions on manufacturing of ethanol from Sugarcane Juice/ Syrup.

BB Thombare, President of WISMA, while speaking to ChiniMandi said, “We have requested a reconsideration and urge cooperation to safeguard the sugar industry and the Ethanol Blending Programme (EBP) for ‘Atmanirbhar Bharat.’ We have also requested government to revise sugar MSP from Rs.3100/- to Rs.3700/- per quintal to compensate the losses due to huge reduction in ethanol production.”

The Roadmap for Ethanol Blending in India 2020-25, prepared by an inter-ministerial committee, estimated an ethanol requirement of 1,016 crore litres to achieve 20 per cent blending targets in ESY 2025-26. In line with the roadmap, oil marketing companies have achieved 10 per cent ethanol blending during 2021-22 and 12 per cent during 2022-23.


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