According to the government notification released on January 15, the Centre has imposed a 50% export duty on molasses resulting from the extraction or refining of sugar. The duty will be in place from January 18, it said.
Earlier, ChiniMandi had reported that the government is contemplating a duty on molasses exports to boost supplies for India’s target of achieving ethanol-blended petrol.
The Indian government is ambitious of attaining 20 per cent ethanol-blended petrol by 2024-25 and 30 per cent by 2029-30. The government had advanced the target of E20 fuel from 2030 to 2025.
A substantial export duty on molasses, supported by various sugar industry lobbies, could enhance the availability of ethanol-blended petrol.
The Food Ministry in early December directed sugar mills not to use cane juice or syrup to produce ethanol. In a U-turn, the central government in mid-December allowed the utilisation of juice as well as B-heavy molasses to produce ethanol but capped the diversion of sugar at 17 lakh tonnes for the current marketing season.
Rahil Shaikh, Managing Director of MEIR Commodities in conversation with ChiniMandi, said, “The imposition of duty has been on the table for the past three years. We were producing ethanol from sugarcane juice and B Heavy Molasses, and exports were permitted. Now, since sugarcane juice and B Heavy have stopped, and C Heavy Molasses has to contribute to ethanol blending, this government move brings back C Heavy Molasses into ethanol blending, which is a positive step. However, it deprives the world market of the molasses needed for animal feed purposes and other uses. India used to export about 1 million tons of molasses, and this will reduce the export business by 50 to 60 percent.”
Vijay Girase, Ethanol consultant, welcomed the move by government and said, “It is a balancing act from the government side. Considering the distillation capacities as well there is likely scope to utilised excess molasses to other state if necessary .i feel due to less crunching this year and next year due to weather as such molasses production is less and if you see data every year India is exporting around 1 million tons of molasses to overseas market this decision will help to get additional ethanol for blending .
WELCOME TO THE GOVT DECISION
THERE IS NO CLARITY FOR 50 % EXPORT DUTY ON MOLASSES.
1. WHETHER THE ABOVE DUTY FOR BASIC PRICE OR FOB PRICE OR C@F PRICE.
2. MOST OF THE MOLASSES EXPORTER LIFTED THE MOLASSES FROM SUGAR MILLS AND STORED IN THE PORT AREA AND MOST OF THE EXPORTER SIGNED AGREEMENT WITH FOREIGN BUYER.IN THIS CASE WHETHER THEY ARE EXEMPTED FOR 50% EXPORT DUTY.
ANYBODY CAN CLARIFY