Thursday, 10 Oct, 2024
By: Yash Gupte
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. Image Source: IANS
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. About 45–50 LMT of extra sugar in the current sugar season (2022–2023) is intended to be converted to ethanol
In a written reply to a question asked in the Lok Sabha, the Union Minister of State for Consumer Affairs, Food, and Public Distribution, Ms. Sadhvi Niranjan Jyoti, shared that during a typical sugar season, sugar production is between 320 and 360 lakh metric tons (LMT) compared to domestic consumption of 260 LMT, which used to cause a significant carryover stock of sugar with mills. This excess stock used to lead to blockage of funds & affected the liquidity of sugar mills resulting in delayed payment of cane dues & resulting in accumulation of cane arrears.
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. About 45–50 LMT of extra sugar in the current sugar season (2022–2023) is intended to be converted to ethanol. By 2025, it is intended to shift 60 LMT of extra sugar to ethanol, which will address the issue of excessive sugar stocks and enhance mill liquidity, assisting in the timely payments of farmers' cane dues. Considering the central government’s efforts to divert the excess sugar for the production of ethanol, India Tracker takes a look at the ethanol production in the country.
Source: Press Information Bureau
The chart shows that the diversion of sugar for the ethanol production has increased from 3.37 LMT in 2018-19 to 36 LMT in 2021-22. 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.
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.
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.
