Centre doubles incentive on sugar sacrificed for producing ethanol

New Delhi: In a move aimed at encouraging sugar mills to divert excess sugar cane/sugar to ethanol that would help in achieving the targets of blending ethanol with petrol, the government on Friday has doubled the incentive on sugar sacrificed for producing ethanol from b-heavy molasses/sugarcane juice/sugar syrup/sugar from October 2021 onwards in their monthly

release quota.

The decision in this regard has been taken to promote ethanol production in the country that would help in decreasing the country's dependency on fossil fuels.

As per the official statement of the Ministry of Food, now, those sugar mills which will be diverting sugar to ethanol would be getting the entire quantity of sugar sacrificed on producing ethanol from B-heavy molasses/sugarcane juice/sugar syrup/sugar in their monthly

release quota.

Notably, mill-wise monthly release quota of sugar for domestic sale by sugar mills is allocated by the Department of Food and Public Distribution every month on the basis of stocks held by them, export performance and diversion of sugar to ethanol.

The practice of a quota system is in place to maintain the demand-supply position of sugar in the country and to ensure sufficient availability of sugar for domestic consumption as well as to stabilise ex-mill prices of sugar.

"In every sugar season (October-September), production of sugar is around 320-330 Lakh MT as against the domestic consumption of 260 LMT which results in a huge carry over stock of sugar with mills. Due to excess availability of sugar in the country, the ex-mill prices of sugar remain subdued resulting in cash loss to sugar mills," the ministry said, adding that this excess stock of 60 LMT also leads to blockage of funds & affects the liquidity of sugar mills resulting in accumulation of cane price arrears.