New Directive on Sugarcane Usage

• The Ministry of Consumer Affairs, Food and Public Distribution issued a directive to sugar mills and distilleries, not to use sugarcane juice or syrup for ethanol production in the ethanol year 2023-2024.

There will be no sugarcane juice for ethanol production

• Existing supplies will be maintained: Based on existing bids received by Oil Marketing Companies (OMCs), the directive permits for the ongoing supply of ethanol from B-Heavy molasses.
• Regulatory Oversight: The Sugar (Control) Order is implemented by the Department of Food and Public Distribution, which is in charge of regulating sugar production and supply.

The rationale for the Directive 

• Ensuring Sugar supply: Given India’s poor sugar output, the government’s action tries to assure enough sugar supply.
• Consideration of Food vs. Fuel: Businesses characterised the decision as a compromise between food security and fuel production.
• The regulation’s Impact on Ethanol Blending Targets: The regulation is crucial in the light of India’s aim of reaching 20% ethanol blending by the ethanol year 2025-2026.

Industry Implications

• ISMA’s Reaction: The Indian Sugar Mills Association (ISMA) is examining the order’s consequences.
• Domestic Sugar Supply: According to industry insiders, this move would secure enough domestic sugar supply, especially with decreasing sugarcane output in states such as Maharashtra and Karnataka.
• Ethanol Blending Programme Impact: The ban is anticipated to have an impact on India’s ethanol blending programme, which is a vital component of the country’s renewable energy policy.
• Ethanol-Only Units’ Consequences: Because of this new strategy, facilities dedicated only to ethanol production may face difficulties.

@the end

• The directive symbolises the Indian government’s strategic choice to prioritise domestic sugar supply over ethanol generation from sugarcane.
• In the next years, it will be critical to monitor the impact of this order on both the sugar business and the ethanol blending programme.

Source: https://indianexpress.com/article/business/govt-bans-use-of-sugarcane-juice-sugar-syrup-for-ethanol-making-in-2023-24-supply-year-9058622/