Friday, 17 May, 2024
By: Yash Gupte
India is expected to generate 330 lakh tonnes of sugar for the current sugar season of 2022–2023 after diverting roughly 43 lakh tonnes for ethanol production. Image Source: IANS
With a projected maximum closing stock of 60 lakh tonnes available by September 30, 2023, the nation now has enough sugar stockpiles to cover its domestic demand for the remaining months of the current season
The government on Tuesday authorized an additional allocation of 2 lakh tonnes of sugar in the domestic quota for August, on top of the 23.5 lakh tonnes already given to mills, in order to meet the increased demand for sugar during the forthcoming festive season. The choice is made in light of the anticipated increase in demand around holidays like Onam, Raksha Bandhan, and Janmashtami. It aims to keep sugar prices in check nationwide so that both consumers and traders profit. The ministry of consumer affairs, food & public distribution in a press release said, “Despite 25 percent increase in international sugar prices in last one year, the average retail price of sugar in the country is about ₹ 43.30 per kg and is likely to remain in range bound only. There has been less than 2 percent annual inflation in the country in sugar prices in last 10 years.”
With a projected maximum closing stock of 60 lakh tonnes available by September 30, 2023, the nation now has enough sugar stockpiles to cover its domestic demand for the remaining months of the current season. Two and a half months' worth of sugar supply can be maintained with this considerable supply.
India is expected to generate 330 lakh tonnes of sugar for the current sugar season of 2022–2023 after diverting roughly 43 lakh tonnes for ethanol production. It is anticipated that domestic consumption will be roughly 275 lakh tonnes. Meanwhile, Aditya Jhunjhunwala, President of Indian Sugar Mills’ Association said that the government should come out with a clear roadmap on ethanol sourcing from the sugar industry. He added, “We (the sugar industry) need to double capacity to produce 750 crore litres. We need to put up more plants and that requires capex and time. We need a clear road map and the prices should be based on a long-term formula taking into consideration the FRP, inflation, sugar prices etc.”
The Union Government has laid a major emphasis on the production of ethanol in the country and also blending it with petrol. The government has taken various steps in providing a boost to the ethanol production and ethanol production capacity in the country. A “Roadmap for Ethanol Blending in India 2020-25” was released by the PM in June 2021 which laid out a detailed pathway for achieving 20 percent ethanol blending. Due to the coordinated efforts of the Public Sector Oil Marketing Companies (OMCs) and the increase in diversion of sugar for ethanol production, the target of 10 percent blending under the programme had been achieved much ahead (August 2022) of the targeted deadline of November 2022 wherein the Public Sector OMCs have attained an average 10 percent ethanol blending in petrol across the country.
Also, recently in the month of February, 20 percent ethanol-blended petrol was made available at a few select petrol pumps in 11 states and the union territories as part of a campaign to increase the use of biofuels to reduce emissions and reliance on foreign exchange depleting imports. The 20 percent ethanol-blended petrol was launched by PM Narendra Modi two months ahead of the planned rollout in April at the India Energy Week in Bengaluru, Karnataka. The chart below shows the ethanol production capacity in the country.
The ethanol production capacity in India has increased from 423 crore litres in 2019-20 to 947 crore litres in 2022-23. This means that the ethanol production capacity has doubled in just three years. The Central Government has taken various steps to increase production and utilization of ethanol. The Government has amended the Industries (Development & Regulation) Act to ensure free movement of ethanol in the country. The Government has also reduced Goods & Service Tax (GST) on ethanol meant for Ethanol Blended with Petrol (EBP) Programme from 18 percent to 5 percent since 2018.
Under the ethanol blending programme, an indicative target of 20 percent blending of ethanol in petrol by 2030 was laid out. Subsequently, the target year for achieving 20 percent ethanol blending in petrol was also advanced to 2025. By blending 20 percent ethanol, the nation could experience significant benefits, including energy security, reduced carbon emissions, improved air quality, self-reliance, the use of damaged food grains, an increase in farmer incomes, the creation of jobs, and more investment opportunities. Also, the central government is urging sugar mills to divert extra sugarcane to ethanol in order to find a long-term solution to the issue of excess sugar
Recently, Union minister Piyush Goyal launched a new Sugar-Ethanol portal on Wednesday, taking a big step towards encouraging renewable energy sources and lowering reliance on fossil fuels. The portal, which was introduced at the "National Conference of Food Ministers of States/UTs," intends to increase sugarcane-derived ethanol production and consumption in India. The portal provides information on legislation, regulations, market trends, and the most recent advancements in the industry, acting as a complete platform for stakeholders in the sugar and ethanol industries.
Oil Marketing Companies (OMCs) have paid sugar mills nearly Rs 81,796 crore under the EBP in the last seven years for ethanol deliveries, which has assisted mills in paying farmers' dues. In addition, the choice is made to purchase damaged and surplus food grains for ethanol production, ensuring price value for surplus grain stock as well as accommodating the fresh season crop to meet EBP target.
Ethanol is environment friendly as one crore litre of ethanol blended petrol can save around 20,000 tons of carbon dioxide emission. Greenhouse gas emissions due to the EBP Programme were reduced by 318.2 lac tons during 2014 to November 2022.
The chart shows that the diversion of sugar for the ethanol production has increased from 0.33 MT in 2018-19 to 3.6 LMT in 2021-22 and it is estimated that about 4.5 million tons of sugar would be diverted for the production of ethanol.
Additionally, in order to strengthen the financial position of sugar mills and enable them to pay farmers cane dues on time, the central government had implemented a number of measures, including extending assistance to mills to facilitate sugar export, extending assistance to mills to maintain buffer stocks, extending soft loans to sugar mills through banks to pay farmers cane dues, and fixing the minimum selling price of sugar, among others. According to the government, the financial condition of sugar mills has improved and more than 99 percent of cane dues up to sugar seasons 2020-21 and 97.40 percent of cane dues for sugar season 2021-22 have been cleared.
The chart below shows the exponential rise in payment to farmers enabled by the EBP programme.
Source: Press Information Bureau
The chart shows that there is a rise in payment to farmers enabled by the EBP Programme. From Rs. 1119 crore in 2013-14, the payment to the farmers has increased to Rs.16793 crore in 2021-22. In addition to this, in the past six years, ethanol supplies and blending percentages have surged by more than five times. In past three Ethanol Supply Years (December- November), revenue of about Rs. 48,573 crore has been realized by sugar mills from the sale of ethanol to Oil Marketing Companies (OMCs), which has helped sugar mills/molasses based distilleries to make timely payment of cane dues of farmers. Therefore, with a view to support sugar sector and in the interest of sugarcane farmers, the central government is encouraging sugar mills to divert excess sugarcane & sugar to ethanol.
