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Business News/ News / India/  Govt encouraging sugar mills to divert excess cane to ethanol: Niranjan Jyoti
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Govt encouraging sugar mills to divert excess cane to ethanol: Niranjan Jyoti

Excess stock used to lead to blockage of funds and affected the liquidity of sugar mills resulting in delayed payment of cane dues and accumulation of cane arrears.

By 2025, it is targeted to divert 60 lakh tonne of excess sugar to ethanol. (Bloomberg News)Premium
By 2025, it is targeted to divert 60 lakh tonne of excess sugar to ethanol. (Bloomberg News)

New Delhi: The government is encouraging sugar mills to divert excess sugarcane to ethanol to address the problem of excess production of the sweetener, said minister of state for consumer affairs, food and public distribution, Sadhvi Niranjan Jyoti.

In a written reply to a question in the Lok Sabha, the minister said that in a normal sugar season, production of sweetener is around 320-360 lakh tonne (LMT) as against the domestic consumption of 260 LMT which used to result in huge carry over stock of sugar with mills.

Jyoti added that this excess stock used to lead to blockage of funds and affected the liquidity of sugar mills resulting in delayed payment of cane dues and accumulation of cane arrears.

She said that the government has fixed target of 20% blending of fuel grade ethanol with petrol by 2025. “In sugar seasons 2018-19, 2019-20, 2020-21& 2021-22 about 3.37, 9.26, 22 & 36 LMT of sugar respectively has been diverted to ethanol. In current sugar season 2022-23, about 45-50 LMT of excess sugar is targeted to be diverted to ethanol."

The minister added that by 2025, it is targeted to divert 60 LMT of excess sugar to ethanol, which would solve the problem of high inventories of sugar, improve liquidity of mills thereby help in timely payment of cane dues of farmers.

Jyoti said that with a view to improve the liquidity position of sugar mills and to enable them to make timely payment of cane dues of farmers, central government had taken various measures viz. extended assistance to sugar mills to facilitate export of sugar; extended assistance to mills for maintaining buffer stocks; extended soft loans to sugar mills through banks to clear cane price dues; fixed minimum selling price of sugar etc.

According to official ministry data, in sugar seasons 2019-20, 2020-21 & 2021-22 about 59.60 LMT, 70 LMT& 109 LMT of sugar was exported respectively.

As a result of these measures, financial conditions of sugar mills have improved and more than 99% of cane dues up to sugar seasons 2020-21 and 97.40% of cane dues for sugar season 2021-22 have been cleared.

With a view to support sugar sector and in the interest of sugarcane farmers, government is encouraging sugar mills to divert excess sugarcane and sugar to ethanol.

“Government has allowed production of ethanol from B-Heavy molasses, sugarcane juice, sugar syrup and sugar and has also been fixing the remunerative ex-mill price of ethanol derived from various feed stocks," said the ministry of consumer affairs, food & public distribution.

As the revenues generated from sale of ethanol by sugar mills/distilleries reach the accounts of sugar mills in around three weeks‘ time as against 3-15 months’ time taken from sale of sugar, production of ethanol will improve liquidity of sugar mills, enabling them to make timely payment of cane dues of sugarcane farmers, the ministry added.

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ABOUT THE AUTHOR
Swati Luthra
Swati Luthra writes on climate change, water, environment and forest issues for Mint. A graduate in Psychology, Swati has been mapping India’s policy initiatives to help meet the pledges made at CoP-26 including achieving net-zero carbon emissions by 2070.
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Published: 14 Dec 2022, 04:56 PM IST
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