In what is seen as a much-needed relief to the sugar mills, the Government is expected to allow the production of ethanol from the ‘actual authentic’ B Heavy Molasses stocks available in the country as on 31st March 2024.
Amid reports of likely sugar production deficit in the 2023-24 sugar season which commenced on 1st October 2023, the Government restricted ethanol production from Sugarcane Juice and B Heavy Molasses and asked sugar mills to take the C Heavy Molasses route, to produce ethanol for the season. Total sugar diversion towards ethanol was also restricted to 17 lakh tons compared to 38 lakh tons of total sugar diversion last year towards ethanol production. This was done to ensure sufficient sugar stock availability in the country to meet internal consumption requirements.
However, as the ongoing season progressed, it became clear that the sugar production in the current season would be higher than expected initially on the back of better yield and sugar recovery.
As per ISMA’s latest sugar production bulletin, the country has produced around 312 lakh tons of sugar (post sugar diversion towards ethanol) as of mid-April, with almost 84 sugar mills in progress. The higher sugar production has put the focus on the sugar balance-sheet in the current year and sugar closing stocks, which industry insiders opine could be higher than that of the previous year unless the excess sugar stocks are absorbed.
The sugar industry has represented the Government to focus on ethanol production from B Heavy Molasses to improve liquidity of sugar mills. This will also be crucial for the country in terms of achieving the 15% ethanol blending target in the current 2023-24 Ethanol Supply Year (ESY).
The country has so far achieved 11.96% ethanol blending till March end. For the remaining months of the ESY, a higher blending target is required to be achieved to meet the 15% blending target. Hence, a higher ethanol supply is needed to achieve the same.
Commenting on this significant development, Managing Director, National Federation of Cooperative Sugar Factories (NFCSF), Prakash Naiknavare said that the Federation was the first to raise the alarm on the 6th December order imposing restrictions on ethanol production. “The Government came out with the notification on 15th December allowing subsumption of 17 LTs of sugar for ethanol production. Subsequently, the improved sugar production numbers were flagged in a letter written by the Federation President Shri Harshavardhan Patil to Hon. Amit Shah ji based on the current B Heavy Molasses stock as on 31st March 2024 is being allowed for producing Ethanol. This will greatly help distilleries to improve their cash liquidity for clearing cane arrears,” he said.
The Government notification on this is expected soon.
