Informist, Thursday, Sep 26, 2024

--ISMA head: Urge govt to hike ethanol, sugar minimum selling prices
--ISMA head: Ethanol blending saved 990-bln-rupee forex over 10 years

NEW DELHI – Sugar mills are likely to divert 4.0-4.5 mln tn sucrose to produce ethanol in the upcoming ethanol supply year starting November, Mandava Prabhakar Rao, president of the Indian Sugar and Bio-energy Manufacturers Association, said. There will be greater clarity on the size of the sugar diversion after the government announces ethanol rates for next year, he added. In the ethanol year 2023-24 so far, India has diverted 2.5 mln tn sugar to produce ethanol.

On sugar exports, officials of the association said India is likely to be able to export about 2 mln tn of the sweetener in the upcoming sugar year 2024-25 (Oct-Sep) amid comfortable domestic stocks. The officials, speaking on the sidelines of the India Sugar and Bio-energy Conference here Thursday, said they see the gross sugar output down 2% on year at 33.3 mln tn, but with a potential upward bias on account of good rainfall this year.

Rao also urged the government to raise the price of ethanol derived from sugarcane-based feedstock and increase the minimum selling price for sugar. "It is unfortunate that the domestic sugar prices are currently not adequate to cover the cost of production," the association chief said. "The MSP (minimum selling price) of sugar has remained at 31 rupees per kg for over five years and needs to be revised. We respectfully urge the government to consider increasing the MSP to reflect the recent rise in the fair and remunerative price of sugarcane."

In February, the government raised the fair and remunerative price for sugarcane for the sugar year 2024-25 to 340 rupees per 100 kg. The fair and remunerative price paid to sugarcane farmers has now been raised four times in recent years. It was increased to 290 rupees per 100 kg in 2021-22 from 255 rupees, then to 305 rupees in 2022-23. Last year, it was raised again by 10 rupees to 315 rupees per 100 kg. The minimum selling price for sugar has been stuck at 31 rupees a kg since 2019.

On ethanol pricing, Rao asked the government to devise a clear formula that derives ethanol rates in line with the fair and remunerative price of sugarcane. "This will enable the industry to make further investments in the Indian production of ethanol and contribute more effectively to the nation's energy goals," he said.

Stressing that the Indian sugar industry is rapidly being transformed into a bio-energy hub, he said the country now not only produces ethanol from sugar, but also derives potash from molasses and is actively engaged in the production of compressed biogas, ethanol, and other bioenergy solutions. “This diversification is paving the way for a more sustainable and energy-efficient future for the country," he said.

Ethanol blending has saved foreign exchange equivalent to almost 990 bln rupees over the past 10 years while also substantially reducing carbon dioxide emissions, according to Rao.

On flexi-fuel vehicles, Rao urged the government to reduce the tax burden and support large-scale manufacturing of flexi-fuel vehicles through a production-linked incentive scheme to encourage green mobility. Flexi-fuel vehicles are powered by ethanol-blended fuels. End

Reported by Pallavi Singhal and Afra Abubacker

Edited by Rajeev Pai

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