A delegation of South Indian sugar millers held meetings with Hon’ble Minister of Consumer Affairs, Food and Public Distribution, Pralhad Joshi and Hon’ble Petroleum & Natural Gas Minister, Shri Hardeep Singh Puri, to address key issues concerning the sugar and ethanol industry. The delegation expressed gratitude to both Ministers for the recent significant measures taken by the Government to relax restrictions, enabling sugar mills and distilleries to produce ethanol from sugarcane juice/syrup, B-Heavy molasses, and C-Heavy molasses as well as permitting the use of rice for ethanol production using Food Corporation of India (FCI) rice as feedstock up to a limit of 23 LMT.
The discussions also focused on the urgent need to revise ethanol pricing based on various feedstocks for the upcoming ESY 2024-25, while aligning these prices with the Fair and Remunerative Price (FRP) of sugarcane for ethanol produced from sugarcane juice/syrup, B-Heavy molasses, and C-Heavy molasses. A price increase for grain-based ethanol, particularly due to the rising cost of maize, was also emphasized. Other key issues included the necessity of increasing transportation costs, resolving significant delays in tanker decantation at OMC depots that is causing disturbance in the supply chain and imposing financial burdens on producers. Also, the delegation requested the Ministers to recommend OMCs to shorten the payment cycle from 21 days to 7 days, as farmers are the ultimate beneficiaries.
Millers also emphasized the widening gap between the cost of sugar production and the stagnant MSP for sugar. Despite rising production costs, the sugar MSP has remained unchanged since 2019 at Rs 31 per kg, creating challenges for sugar producers. Therefore, they urged an increase in the sugar MSP.
The delegation included notable industry leaders such as Dr. Murugesh Nirani, Chairman of the MRN Group, Mr. Mandava Prabhakar Rao of NSL Group, and Mr. Chandan Shirgaokar, Joint Managing Director at Ugar Sugar Works Ltd. They stressed the importance of aligning the pricing mechanism with the cost of sugarcane. This revision is essential as the sugar industry is expected to supply approximately 55% of the ethanol required to meet the government’s target of a 20% ethanol blend by 2025. A fair and stable pricing structure would promote continued investment in ethanol production and contribute to the government’s efforts to reduce dependence on fossil fuels. Both Union Ministers acknowledged the concerns brought forward by the delegation and reiterated the government’s commitment to the Ethanol Blending Program. They assured industry leaders that the government would work closely with stakeholders to address these issues and foster a favourable environment for the growth of ethanol production in the country.
