Recently, the Food Ministry issued a fresh order reversing the ban on the use of sugarcane juice (SCJ) for making ethanol and allowed the utilisation of the juice as well as B-heavy molasses (BHM) to produce ethanol in the ESY 2023-24.
According to the Department of Food and Public Distribution (DFPD) order dated December 15, 2023, Oil Marketing Companies (OMCs) have been asked to make revised allocations and placement of revised contracts for each distillery for the supply of sugarcane juice and B heavy molasses-based ethanol within a total diversion of 17 lakh tonnes (LMT) sugar (against the earlier 35 LMT diversion). OMCs are instructed to notify the Food Ministry after the placement of the revised contracts.
To understand the expected allocation, the National Federation of Cooperative Sugar Factories Limited (NFCSF) has estimated various options for revised allotments.
In October 2023, OMCs issued a tender for 825 crore litres of ethanol for ESY 2023-24, allocating 265 crore litres from sugar-based feedstocks, including 135 crore litres from sugarcane juice/syrup and 130 crore litres from B-heavy molasses.
According to the NFCSF, in case of reallocation based on 11 LMT sugar diversion for BHM & 6 LMT sugar diversion for SCJ, the expected allotment for SCJ is 36 crore litres, whereas for BHM, it is 130.13 crore litres, and the total is 166.13 crore litres.
The second option, in case of reallocation based on 8.5 LMT sugar diversion for BHM & 8.5 LMT sugar diversion for SCJ, the expected allotment for SCJ is 51 crore litres, whereas for BHM, it is 101 crore litres, and the total is 152 crore litres.
The third option, in case of reallocation in the ratio of the previously allocated quantity, the expected allotment for SCJ is 52 crore litres, whereas for BHM, it is 99 crore litres, and the total is 151 crore litres.
Prakash Naiknavare, Managing Director of NFCSF, while speaking to ChiniMandi, said, “The decision to curtail ethanol supplies with 17 lakh tonnes sugar diversion is in the national interest, and we welcome this decision. But the reallocation of ethanol needs to be carefully done in such a way that ready stock in the pipeline and the contracted stock need to be considered, and we request consideration for allotment to newly installed units that could not participate in the tender.”
The notification by DFPD states that upon receiving communication from OMCs regarding the revised quantity of sugarcane juice and B heavy molasses-based ethanol as mentioned in the notification, all sugar mills and distilleries will supply ethanol strictly as per the revised quantity of SCJ & BHM ethanol.
DFPD, in a released order, also stated that no diversion of sugarcane juice and B Heavy molasses is allowed for the production of Rectified Spirit (RS)/Extra Neutral Alcohol (ENA).
