Sugar mills tender to supply 94 crore litres of ethanol

Sugar mills in Maharashtra have filled tender to supply 94 crore liters of ethanol to the Oil Marketing Companies (OMC) for the Ethanol Supply Year (December- November) 2021-22. This is expected to divert 12 lakh tonnes of sugar in the state with most of the ethanol being produced either from B heavy or directly from cane syrup.

The Union government’s push for ethanol to increase blending in fuel and to decrease the carry over stock of sugar has seen mills react positively. For the Ethanol Supply Year, the OMCs had floated national tenders for supply of 458 crore litres. Till February 20, the OMCs have finalised supplies of 416 crore litres and letter of intent (LOI)s for 401 crore litres have been issued.

Till February 20, over 80 crore litres was supplied taking the blending to 9.07 per cent. Figures from the industry shows that most of the fuel additive has been produced from B heavy molasses.

In Maharashtra, 68 sugar mills have started producing ethanol and in line with the national trend, majority of the mills are producing the fuel additive from B heavy molasses.

The Centre has fixed premium rates for ethanol produced from cane juice/syrup followed by B heavy molasses.

This is to ensure maximum reduction of sugar, which would reduce the carry over burden for mills. A bumper back-to-back production had led sugar mills both in Uttar Pradesh and Maharashtra failing to pay their farmers.

Over the last few years, diversion towards ethanol has allowed mills enough liquidity to clear their sugarcane farmers’ dues on time. While ethanol production has helped reduce the carry over stock, Maharashtra is expected to see a bumper season and can well surpass Uttar Pradesh in terms of sugar production. Officials of the Sugar Commissionerate estimate that 112 lakh tonnes of sugar was produced during the present season. However, industry sources say the final figure could be around 120 lakh tonnes.