NFCSF wants Centre to allow surplus sugar for ethanol production

The National Federation of Cooperative Sugar Factories Ltd (NFCSF) has called upon the government to permit the diversion of 18 lakh tonnes of surplus sugar towards ethanol production.

Representatives from NFCSF held discussions with Union Food Secretary Sanjeev Chopra, Sugar Joint Secretary (Sugar) Aswani Srivastava, Chief Sugar Director Sangeet Singla, and other officials from the sugar department recently. They emphasized the financial strain faced by sugar mills due to abrupt restrictions imposed by the Centre on ethanol production.

NFCSF pointed out that due to an extended sugar crushing season and high extraction rates, there will be approximately 18 lakh tonnes of surplus sugar in storage facilities at the end of this sugar season. They contend that this surplus should be permitted for ethanol production.

In December, the Indian government imposed an immediate ban on sugar mills and distilleries using sugarcane juice or sugar syrup for ethanol production to ensure sufficient sugar availability for domestic consumption. Despite industry demands, the Centre has declined to increase the allocation of sugar for ethanol production beyond the 17 lakh tonnes already designated for the entire season.

The Central government’s decision to mandate the sale of at least 90 percent of the sugar quota from February is impacting sugar prices in the market, resulting in a decrease of Rs 250 per quintal. Additionally, trader participation in tenders has dwindled, leading to unsold quotas by the end of February. In light of these challenges, officials have requested a relaxation of the 90 percent sale restriction.

The sugar industry of the Maharashtra region would argue that there will be no shortage of sugarcane given the production levels. They assert that millers would benefit if surplus sugar is permitted for ethanol production.

Millers in Maharashtra have submitted a memorandum to the government, indicating that sugar mills can only meet Fair and Remunerative Price (FRP) payments to farmers and cover expenses if ethanol production from surplus sugar is allowed.

Furthermore, the millers of the region believe that restrictions on ethanol production and low Minimum Support Price (MSP) will compel the majority of mills to permanently cease operations from the next season.