In response to a recent tender issued by Oil Marketing Companies (OMCs) for the supply of around 88 crore litres of Denatured Anhydrous Ethanol for the fourth quarter of the Ethanol Supply Year 2024-25, the West Indian Sugar Mills Association (WISMA) has raised concerns over the prioritization terms outlined in the process. According to the tender, cooperative sugar mills (CSMs) were given first preference, followed by dedicated ethanol plants (DEPs), with private sugar mills placed at third level.
As per the tender document, quantities offered by CSMs under National Federation of Cooperative Sugar Factories Limited (NFCSF) shall be given first preference and accepted in full for allocation (up to the requirement). Quantities offered by DEPs as per terms and conditions of LTOA shall be given second preference and will be accepted in full for allocation up to the balance requirement (subject to fulfilling the T&Cs of the quantity bidding tender for preferential allocation). For Delhi cluster requirement, the offer of DEPs assigned to Delhi shall be considered.
In a communication to Union Minister of Consumer Affairs, Food and Public Distribution, Pralhad Joshi, and Minister of Petroleum and Natural Gas, Hardeep Singh Puri, WISMA has urged them to withdraw/delete the terms of ethanol purchase priority set by OMCs.
WISMA said, “With the terms and regulations mentioned by OMCs in the tender, private sugar mills/distilleries have been thrown at a third level after CSMs and DEPs and have been placed at great financial loss and injustice, as private sugar mills, having most of Maharashtra’s sugar mills having large number of farmers as shareholders in these companies and front runner in timely payments to sugarcane farmers. The raw material sugarcane is same, which is supplied by cane farmers either to private or cooperative Sugar mills depending on their membership and cane payments structure, promptness, distance from farm and services.”
WISMA highlighted that the terms set by OMCs will deprive sugarcane farmers who supply cane to private mills of better payments in which ethanol income is substantial.
“As per Dr. C. Rangarajan formula and Maharashtra State Sugarcane Price Control Act-2013, the disbursement of additional income based on annual financial statements above Maharashtra board headed by Chief Secretary is distributing additional income by way of Revenue Sharing Formula (RSF) to sugarcane farmers, monitored by Commissioner of Sugar Maharashtra State annually. Due to above strength and irrational terms placed by OMCs, Sugarcane farmers supplying cane to private mills will be deprived of better payments to them in which ethanol income is substantial,” the letter further reads.
According to the WISMA, Maharashtra’s state private sugar mills and distilleries have made huge investments to the tune of Rs. 15,000 crores in ethanol production capacities over the last six years, starting from 2018, under the Ethanol Capacity Building Interest Subvention Programme. They have contributed immensely to reducing national crude oil imports, saving foreign exchange, ensuring timely payments to sugarcane farmers, and supporting the rural economy. The 141 private sugar mills and distilleries in Maharashtra are strongly supporting the Government of India’s Aatmanirbhar Bharat Mission.
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