Central government on Tuesday imposed a 50% export duty on molasses, a byproduct of sugar cane. The decision will come in force from January 18.
The decision has been taken given the possibility of a decline in domestic sugar production in the current season. It will ensure greater availability of molasses for domestic companies, thereby giving a boost to their ethanol blending targets.
Central government has imposed restrictions on converting sugar cane syrup or juice and B heavy molasses into ethanol to ensure adequate sugar production in the country. Although there is no ban on C heavy conversion, a sugar cane byproduct that has no sugar content left in it. Whereas, the B-heavy molasses and sugar cane juice have some sucrose content left in them for sugar production.
Through this move, around 10 lakh tonnes of molasses will be available to produce additional 25 crore litres of ethanol to the domestic distilleries, experts say.
Meanwhile, sugar industries have said that the government should also impose ban on export of C heavy molasses so that they can produce more ethanol to meet the expenses made towards setting up the distilleries or expanding the capacities of the existing ones.
Vijay Autade, senior expert of sugar industry said, “50% export duty on the molasses will restrain the exporters from exporting molasses. The international prices for molasses is nearly INR 10,000 per tonne at factory gate and if the 50% export duty is imposed, then the cost will spiral further. The domestic standalone and attached distilleries will jump upon this opportunity..”
As per Autade, Maharashtra will benefit from the decision. “The distilleries from Maharashtra alone will produce ethanol worth INR 1,250 crore to 1,300 crore according to the current prices. Maharashtra has total installed capacity of 250 crore litres of ethanol production, which is the highest in the country. By imposing higher export duty, we will be able to produce more ethanol to meet our demand.”
The Indian Sugar and Bio-energy Manufacturers Association (ISMA) has written to the government to increase the procurement price of ethanol made by syrup or both types of molasses by INR 10 per litre for the current financial year so that the distillers can recover the expenses made over installation of plants and can repay to the fair price to the sugarcane procured from the farmers.
