Sugar mills, distilleries to earn revenue of over Rs 18,000 crore from ethanol sales in 2021-22 season

The minister observed that diversion of excess sugar to ethanol would solve the problem of high inventories of sugar, improve the liquidity of mills thereby, helping in timely payment of cane dues of farmers.

By 2025, the minister said the target is to divert 50 lakh tonnes of excess sugar to ethanol. (File)
By 2025, the minister said the target is to divert 50 lakh tonnes of excess sugar to ethanol. (File)

Sugar mills and distilleries are likely to earn revenue of over Rs 18,000 crore in 2021-22 season by selling ethanol to oil marketing companies (OMC) for blending with petrol.

In a written reply to the Lok Sabha, Minister of State for Food and Consumer Affairs Sadhvi Niranjan Jyoti informed that during the last three ethanol supply years 2018-19, 2019-20 and 2020-21, the revenue of about Rs 8,079 crore, Rs 7,823 crore and Rs 13,598 crore, respectively, have been generated by sugar mills/distilleries from the sale of ethanol to OMCs.

This has helped sugarcane mills in making timely payment of cane dues of farmers, she added.

“lt is likely that more than Rs 18,000 crore revenue would be generated in current sugar season 2021-22,” Jyoti said.

Ethanol supply year runs from November to October, while sugar marketing year from October to September.

“In every sugar season, production of sugar is around 320-330 lakh tonnes as against the domestic consumption of 260-270 lakh tonnes, which results in huge carry over stock of sugar with mills.

“This excess stock of 60 lakh tonnes leads to blockage of funds & affects the liquidity of sugar mills, resulting in accumulation of cane price arrears,” Jyoti said.

The minister observed that diversion of excess sugar to ethanol would solve the problem of high inventories of sugar, improve the liquidity of mills thereby, helping in timely payment of cane dues of farmers.

“In sugar season 2020-21, about 22 lakh tonnes of surplus sugar has been diverted to ethanol and about Rs 13,598 crore revenue has been generated by sugar mills from the sale of ethanol to OMCs. In sugar season 2021-22, it is likely that about 35 lakh tonnes of excess sugar would be diverted to ethanol,” Jyoti said.

By 2025, the minister said the target is to divert 50 lakh tonnes of excess sugar to ethanol.

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