Bonus for sugar industry, govt allows sugar syrup for ethanol production

By: |
September 3, 2019 3:56 PM

All distilleries will be able to take benefit of the scheme and the large number of them are likely to supply ethanol for the Ethanol Blended Petrol (EBP) programme.

sugarcane, sugar, ethanol, sugar glut, excess production, oil marketing companies, OMCsIn an effort to reduce the difficulty of sugarcane farmers, improved price to ethanol suppliers will help in the reduction of cane farmers’ arrears.

In an unprecedented move, the government has allowed sugar and sugar syrup, both for ethanol production. In a press briefing held on Tuesday afternoon, Union Ministers Dharemendra Pradhan and Prakash Javadekar further announced major decisions related to fixing ethanol prices, giving a sigh of relief to the sugar industry. With the new decision, all distilleries will be able to take benefit of the scheme and large number of them are likely to supply ethanol for the Ethanol Blended Petrol (EBP) programme. In an effort to reduce the difficulty of sugarcane farmers, improved price to ethanol suppliers will help in the reduction of cane farmers’ arrears. 

Cabinet committee on economic affairs (CCEA) has approved mechanism revision of ethanol price for supply to public sector oil marketing companies (OMCs) for procurement of ethanol from  December 2019 for one year period. Adding to it, OMCs have also been advised to fix realistic transportation charges for feasible long distance transportation. 

The cabinet has increased the price of ethanol from C heavy molasses route from Rs 43.46 per litre to Rs 43.75 per litre and B heavy molasses route from Rs 52.43 per litre to Rs 54.27 per litre. The price of ethanol from sugarcane juice, sugar and sugar syrup have also been fixed at Rs 59.48 per litre. The move to increase ethanol blending is aimed to reduce import dependency, support agricultural sector, more environmentally friendly fuel, decrease pollution and enhance farmers’ income.  

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Sugar farmers in the country have been under stress as their outstanding payment dues have shot up by 54 times in just one year, as sugar mills grapple with tight liquidity amid a surge in production. Sugarcane farmers also have their cash stuck with the sugar mills, who are unable to disburse payments due to non-availability of funds. Fall in sugar prices due to glut in FY18 resulted in the accumulation of sugarcane price arrears of the farmers.

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