In a bid to address the surplus ethanol stock conundrum, the Indian Sugar and Bio-energy Manufacturers Association (ISMA) has written a letter dated March 19, 2024, to the Joint Secretary (Sugar), Department of Food and Public Distribution (DFPD), urging for the utilisation of excess ethanol derived from B heavy molasses and sugarcane juice.
The letter highlights ISMA’s revised sugar production forecast for the current fiscal year 2023-24, indicating a higher-than-anticipated output primarily attributed to improved cane yields in key States such as Maharashtra and Karnataka. With the revised estimate pegged at 340 lakh tons, a significant uptick from the earlier January 2024 projection of 330.5 lakh tons, the association underscores the pressing need for alternative utilisation avenues for excess ethanol stock.
ISMA underscores the predicament faced by several distilleries that had geared up for the Government’s ambitious ethanol blending program. These distilleries made substantial investments and modified sugar mill operations to focus solely on producing B heavy molasses, thereby rendering them unable to produce C Molasses. The sudden Governmental directive in December 2023 to discontinue the use of sugarcane juice/B heavy molasses for ethanol production dealt a severe blow to the sugar/distillery industry and the ethanol blending program, exacerbating the challenges faced by member factories.
An assessment conducted by the Association reveals a surplus of B Heavy molasses and ethanol derived from B Heavy/sugarcane juice, surpassing the revised allocations for the 2023-24 Ethanol Supply Year (ESY) following the Government order. Sugar equivalent of this excess stock is estimated at around 3 lakh tons. Therefore, accounting for the above net sugar diversion for the season would be around 20 lakh tons, including 17 lakh tons already permitted by the Government. This would mean a net sugar production of 320 lakh tons during the season 2023-24.
Given the inability to revert excess molasses/ethanol back to sugar and its consequent stagnation, ISMA advocates for leveraging this surplus stock, estimated at around 32-33 crore litres of ethanol, to augment the ethanol blending program in the current ESY.
The Association further emphasises the urgency of the situation, noting the rapid deterioration of B Heavy molasses over time, particularly exacerbated by the onset of the summer season.
