Sugar mills seek diversion of additional 10-12 lakh tonnes sugar for ethanol production

New Delhi: Indian Sugar Mills Association (ISMA) on Tuesday said it has requested the government to permit diversion of additional 10-12 lakh tonnes of sugar for ethanol production in the current season, amid reports of higher output.

The government has capped sugar diversion for ethanol making at 17 lakh tonnes for the current 2023-24 season (October-September) in view of likely fall in sugar production due to drought in parts of Maharashtra and Karnataka.

Till January 15 of the ongoing season, ISMA said mills have manufactured 149.52 lakh tonnes of the sweetener, down by 5.28 per cent from 157.87 lakh tonnes in the year-ago period.

However, as per reports, recent weather has been favourable for the standing cane crop and cane commissioners of major states like Uttar Pradesh, Maharashtra and Karnataka have done upward revision in their sugar production estimates for 2023-24 SS to the tune of 5-10 per cent each," ISMA said in a statement.

"We also believe that sugar production in the current year could be higher than what was expected earlier," ISMA said in a statement.

Accordingly, ISMA has requested the government to allow additional 10-12 lakh tonnes of sugar diversion towards ethanol production, it said.

"Even after allowing additional sugar for production of ethanol, closing sugar balance shall be sufficient to cater a couple of months into the next season," it added.

ISMA also demanded the government immediately announce an upward revision in the procurement cost of ethanol produced from sugarcane juice, syrup, B-heavy molasses for 2023-24 ethanol supply year (November-October).

The government had recently announced an incentive for ethanol made from maize. But since the sugarcane crop is more efficient in terms of water, nutrient, land use or carbon sequestration, as compared to maize, sugarcane also deserves to be supported more by the government, it added.

As per the ISMA's latest data, the country has produced 149.52 lakh tonnes of sugar till January 15th of the ongoing 2023-24 season, down from 157.87 lakh tonnes in the year-ago period.

Around 520 mills were in operation so far this season, compared to 515 mills in the year-ago period.

Sugar production in Maharashtra, the country's leading producer, was down at 50.73 lakh tonnes till January 15 of the current season, as against 60.26 lakh tonnes in the year-ago period.

Similarly, production in Karnataka -- the country's third largest sugar producer -- was down at 31.16 lakh tonnes as against 33.58 lakh tonnes in the said period a year ago.

However, the production in Uttar Pradesh, the country's second largest sugar producer, remained higher at 45.73 lakh tonnes till January 15 of the ongoing season, as against 40.65 lakh tonnes in the year-ago period, the data showed.

ISMA said it will bring out its second estimate of sugar production by the end of this month.