New Delhi, India – In a move to ensure adequate sugar availability and stabilize prices for domestic consumption, the Indian government has directed all sugar mills and distilleries to stop using sugarcane juice for ethanol production in the current 2023-24 ethanol supply year (December-November).
This directive, issued under clause 4 and 5 of the Sugar (Control) Order 1966, aims to prioritize sugar production and prevent any potential shortages that could lead to price hikes.
However, the government has clarified that the supply of ethanol from existing offers received by Oil Marketing Companies (OMCs) from B-heavy molasses will continue. This means that ethanol production will not be completely halted, but sugar mills will need to utilize B-heavy molasses, a byproduct of sugar production, instead of the more efficient sugarcane juice.
Reasons for the Decision:
The government’s decision is based on several factors, including:
- Estimated Fall in Sugar Production: Sugarcane production is projected to decline in the 2023-24 marketing year (October-September) due to factors like unfavorable weather conditions. This could potentially lead to a reduction in sugar availability.
- Rising Sugar Prices: Sugar prices have been showing an upward trend in recent months, causing concerns about affordability for consumers.
- Promoting Ethanol Production from B-heavy Molasses: The government wants to encourage the use of B-heavy molasses for ethanol production, as it is a readily available and cost-effective alternative to sugarcane juice.
The sugar industry has welcomed the government’s decision. The National Federation of Cooperative Sugar Factories (NFCSF) has stated that there is sufficient stock of ethanol made from B-molasses available to meet the demand. The move is also seen as a positive step towards supporting the sugar industry and ensuring a stable supply of sugar for domestic consumption.
The government’s directive is expected to stabilize sugar prices in the domestic market. This will provide relief to consumers who have been grappling with rising food prices in recent months.
By implementing this measure, the government aims to ensure food security and prevent any potential rise in sugar prices in the country. The long-term impact of this decision on both sugar producers and consumers remains to be seen however, This decision is likely to have a positive impact on sugar prices in the short term.
