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Ethanol helps sugar mills clear arrears to farmers

Sale of fuel blend netted Rs. 35,000 cr.

Sugar mills’ sale of ethanol to oil marketing companies helped them earn additional revenue and clear cane price arrears to farmers, the Department of Economic Affairs said in the annual Economic Survey placed in the Parliament on Monday.

The department said that in the past four sugar seasons ending 2020-2021, sugar mills/distilleries generated revenue of about ₹35,000 crore from the sale of ethanol to oil marketing firms, which helped in clearing the sugar cane price arrears owed to farmers.

With the aim of managing surplus output of sugar and enhancing liquidity of mills, the Centre had taken various steps including incentivising sugar mills to divert excess sugar cane/sugar to ethanol production and providing financial assistance for transport to mills to facilitate the export of sugar.

About 70 lakh tonnes of sugar was exported in sugar season 2020-2021 in comparison with 59.6 lakh tonnes during the preceding season. Contracts for the export of about 30 lakh tonnes of sugar have already been signed in the current season that ends in September.

India is the largest consumer and the second-largest producer of sugar in the world. Average annual production of sugar cane is about 35.5 crore tonnes which is used to produce about three crore tonnes of sugar. Domestic consumption is estimated to be about 2.6 crore tonnes in 2020-21. Over the years, India has become a surplus producer of the kitchen commodity.
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