Centre restricts sugarcane ethanol inputs, Maharashtra mills face ₹7,000cr loss
The Indian government just restricted the use of sugarcane juice, syrup, and B-heavy molasses for making ethanol through tender conditions for oil companies, hoping to keep more sugar in the market and prices steady.
But this move could hit Maharashtra's sugar mills hard, with an estimated ₹7,000 crore loss in revenue, making it tougher for them to pay farmers on time.
Mill owners warn ethanol plants stranded
Since the new rule only allows ethanol from C molasses, while companies are also allowed to buy ethanol made from other crops, mill owners worry about wasted capacity and big financial setbacks.
Harshvardhan Patil, president of the National Federation of Cooperative Sugar Factories (NFCSF), said, "Ethanol saved India foreign exchange on fuel and also became a source of revenue for sugar factories and farmers," and "Due to the new decision, the ethanol plants will be mostly stranded, as C-molasses is barely used in ethanol production. Instead of a complete ban on the diversion of three types of cane products, the Centre should have reduced the quantity of diversion."
Farmer leader Raju Shetti suggested raising the price of C molasses-based ethanol to ₹70 per liter to help cover losses.
There's also hope among experts that the policy might get reviewed next year.