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The National Federation of Cooperative Sugar Factories (NFCSF) has welcomed the government’s decision to permit utilization of 7 lakh tonnes of excess B-heavy molasses as feedstock for ethanol manufacturing. The move will allow sugar mills to process accumulated stockpiles of the byproduct generated prior to restrictions imposed in December last year over concerns about diversion for potable liquor production.
“This comforting decision will release around Rs 700 crore stuck in the remaining B-heavy molasses stocks at mills,” said NFCSF President Harshvardhan Patil. He revealed that on the food ministry’s recommendation, the petroleum ministry is allocating additional ethanol quotas to individual distilleries based on their physical molasses inventories as of March 31, 2024.
Patil stated that of the 7 lakh tonnes approved, roughly 3.25 lakh tonnes of surplus sugar would be diverted to produce 38 crore litres of ethanol valued at Rs 2,300 crore. This output is expected to reduce sugar stocks, consequently boosting local sugar prices.
The NFCSF president highlighted that proceeds from selling the 38 crore litres of ethanol, amounting to Rs 2,300 crore, would become available to mills operating distillation facilities nationwide. This would enable timely and complete payments to farmers supplying sugarcane.
The government had initially banned B-heavy molasses use on December 7 last year over concerns it was being diverted for production of potable liquor instead of ethanol. However, a week later the prohibition was revoked with the condition that cane juice and molasses utilization remained capped at 17 lakh tonnes of sugar diversion for 2023-24 ethanol output. Wednesday’s approval allows surplus molasses stockpiles to be processed.
India’s sugar production for the ongoing 2023-24 season is estimated at 315-320 lakh tonnes, excluding the 17 lakh tonne diversion for ethanol already permitted in December 2023.
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