New delhi: Indian sugar mills are gradually shifting towards ethanol production in the wake of surplus sugar production in the last few years. Ethanol is increasingly becoming popular as a green, non-polluting fuel.
According to an India Sugar Mills Association (ISMA) official, in the current season (October 2018- September 2019) so far, about 29.5 crore litres of ethanol have been supplied to oil manufacturing companies, and this is equivalent to sugar diversion of about 3 lakh tonnes. These mills have offered to supply 51 crore litres of ethanol, produced from heavy molasses/sugarcane juice for the first time, which will lead to a reduction in sugar production by 5 lakh tonnes.
As per estimates, the overall sugar production will be 282 lakh tonnes in 2019-20 which is about 47 lakh tonne lower than the current 2018-19 production of about 329.5 lakh tonne. However, this is a preliminary estimate. After considering rainfall in July-September 2019, the water situation in reservoirs and satellite images, the ISMA will review the estimates.
The government, on its part, has been asking sugar mill owners to switch to ethanol production to tackle the problems stemming from surplus production and falling prices. State governments are being asked to expedite the permission requests from sugar mills for converting from sugar to ethanol, within a week or so. Sources said it is not possible to reduce the surplus production of sugar and it is also difficult to change the crop patterns, and sugar mills are forced to decide whether they want to make sugar or ethanol from sugarcane juice.
The Centre has formulated a consistent, transparent and long-term ethanol purchase policy. The ethanol economy in the country is Rs 11,000 crore and it is set to rise to Rs 50,000 crore in the next two years. Ethanol being a pollution-free, green fuel is getting popular gradually. Besides surplus production, the global market condition is also responsible for the situation.
In Brazil, the price of sugar is Rs 22 per kg, while in India it is Rs 32-34 per kg. Therefore, in the world market, nobody is willing to buy Indian sugar and as a result, India is making losses. Brazil is the second largest ethanol producer after US. Large-scale use of ethanol takes place only in these two countries. Though India surpassed Brazil as the world’s largest sugar producer, it is learning from the South American country’ experience of shifting from sugar to ethanol production.
A few months ago, the Centre approved incentives worth Rs 3,300 crore to help sugar mills boost ethanol production capacity. The diversion, the government hopes, will improve the financial health of these sugar mills, which are suffering losses.