ISMA seeks Govt nod for diverting 10-12 lakh tonnes more sugar for ethanol

The Indian Sugar Mills Association (ISMA) has formally requested the Central Government to authorize the diversion of an additional 10-12 lakh tonnes of sugar for ethanol production in the current season. This is while responding to reports of increased output. The government had previously set a cap on sugar diversion for ethanol at 17 lakh tonnes for the ongoing 2023-24 season (October-September).

The decision was taken due to anticipated declines in sugar production caused by drought in parts of Maharashtra and Karnataka.

As of January 15 in the current season, ISMA reported a sugar production of 149.52 lakh tonnes, marking a 5.28% decrease from the 157.87 lakh tonnes recorded in the same period the previous year. However, recent favourable weather conditions for the standing cane crop and upward revisions in sugar production estimates by cane commissioners in major states like Uttar Pradesh, Maharashtra, and Karnataka, ranging from 5-10% each, suggest a potential increase in sugar production for the year.

ISMA expressed its belief that sugar production for the current year may surpass earlier expectations and accordingly urged the government to permit an additional 10-12 lakh tonnes of sugar diversion for ethanol production.

ISMA also emphasized that even with this diversion, the closing sugar balance would be adequate to cover the initial months of the next season.

Additionally, ISMA called for an immediate announcement by the government regarding an upward revision in the procurement cost of ethanol produced from sugarcane juice, syrup, and B-heavy molasses for the 2023-24 ethanol supply year (November-October). While the government had recently incentivized ethanol made from maize, ISMA argued that sugarcane, being more resource-efficient, deserves greater support.

A Season Of Bumper Production

The latest data from ISMA reveals that the country has produced 149.52 lakh tonnes of sugar until January 15th in the ongoing 2023-24 season, down from 157.87 lakh tonnes in the same period the previous year. A total of 520 mills were operational, compared to 515 mills in the previous year.

Sugar production in Maharashtra, the leading producer, decreased to 50.73 lakh tonnes, while production in Karnataka and Uttar Pradesh showed declines and increases, respectively. ISMA plans to release its second estimate of sugar production by the end of this month.