Sugar mills, distilleries restricted from using sugarcane juice for making ethanol

The Union government on Thursday ordered sugar mills and distilleries not to use sugarcane juice for manufacturing ethanol, in a bid aimed at ensuring an adequate supply of the sweetener at stable prices for domestic consumption.

“In exercise of powers conferred under clause 4 & 5 of the Sugar (Control) Order 1966, it is directed to all sugar mills and distilleries not to use sugarcane juice/sugar syrup for ethanol in ESY (ethanol supply year) 2023-24 with immediate effect," said the Department of Food and Public Distribution (DFPD), under the Ministry of Consumer Affairs, Food and Public Distribution, wrote in a communication addressed to the CEOs and managing directors of sugar mills and distilleries. 

However, the food ministry told the mills and distilleries that the supply of ethanol from existing offers received by oil marketing companies (OMCs) from B-heavy molasses will continue.

Lower diversion for ethanol will help the world's second largest sugar producer in increasing output of the sweetener, which is expected to fall because of below-normal rainfall in key growing states.

Fuel retailers in the country buy ethanol from sugar mills to blend with gasoline and they were paying higher price for ethanol produced from juice and B-heavy molasses.

Patchy rains in Maharashtra and Karnataka have raised concerns about the country's overall sugar production this year.

Producers' body Indian Sugar Mills Association (ISMA) a producers' body said last month that sugar production was likely to fall eight per cent to 33.7 million metric tonnes in the 2023-24 marketing year.

With inputs from agencies