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Ethanol versus sugar: Better sugar prices likely to crush Centre’s goal of boosting ethanol production

Millers say that around 40 lakh tonnes of sugar can end up being diverted for production of ethanol by the end of December-November for the 2023-24 season.

The low availability of sugarcane and better prices of sugar can put a spanner in the central government’s works for promoting ethanol production, a byproduct of the sugar industry, this season.

As against the initial estimates of 43-45 lakh tonnes of sugar being subsumed to manufacture ethanol, millers say that around 40 lakh tonnes of sugar can end up being diverted for the production of ethanol by the end of the Ethanol Supply Year (ESY) (December-November) 2023-24.

India’s ambitious target of achieving 20 per cent blending by 2025 might be tough to meet given this scenario, they feel.

India’s sugarcane crushing season of 2023-24 has started with the spectre of a less-than-normal monsoon hovering over it.

Maharashtra and Karnataka, the two major sugar and ethanol producing states, have reported lower cane availability than last year. Before the season, the industry had said 43-45 lakh tonnes of sugar would be subsumed to produce ethanol.

However, better profits from sugar than ethanol can make mill owners think twice before producing sugar directly from sugarcane juice or sugar syrup. Instead, most mills would prefer to produce ethanol from B-heavy or C molasses, which results in lesser ethanol production and more sugar production.

Molasses is the viscous liquid obtained from cane juice after sugar extraction. B heavy molasses results in lower sugar production while C molasses results after complete sugar is extracted from cane juice. The molasses goes through three stages — A, B, and C, the last one being where the molasses are most un-crystallised and non-recoverable.

At present, the ex-mill price of sugar (the price at which mills sell sugar at the mill gate) hovers between Rs 3,700 and Rs 3,750 for one quintal. Millers said that at this price, ethanol is not economically viable.

“Oil Marketing Companies (OMC) buy ethanol produced directly from syrup at Rs 65.61 for one litre. This price was feasible if the sugar price was at Rs 3,330-3,400 for a quintal. But at the present the price of sugar is not feasible,” said a miller from Uttar Pradesh.

Most millers feel that instead of syrup, it would be better to use B heavy molasses which would see a bit lesser production and can fall below the 40 lakh tonnes of sugar subsumed as estimated.

At present, India has achieved 12 per cent blending of fuel and it is expected that 15 per cent blending (mixing of ethanol with fuel for cleaner emission) will be achieved next year. However, the central government’s target of 20 per cent blending by 2025 seems to be difficult given the present scenario. “Even for the next season sugarcane availability for the 2024-25 season is in question. Maharashtra and Karnataka have reported lesser planting. All depends on the next monsoon but the blending target would be difficult to achieve,” the miller said.

Ethanol, or ethyl alcohol, is a liquid that has several uses. At 95% purity, it is called rectified spirit and is used as an intoxicating ingredient in alcoholic beverages. At 99 percent-plus purity, ethanol is used for blending with petrol.

The above news was originally posted on news.google.com

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