50pc export duty imposed on molasses to boost supply for ethanol production

The government has imposed 50 per cent export duty on molasses - a by-product of sugarcane and key ingredient for ethanol production - amid likely decline in sugar production in the current season.The order will come into force from January 18, a finance ministry notification said.

Team RuralVoice

Published: Jan 16, 2024 - 15:49 Updated: Jan 16, 2024 - 19:45

50pc export duty imposed on molasses to boost supply for ethanol production

The government has imposed 50 per cent export duty on molasses - a by-product of sugarcane and key ingredient for ethanol production - amid likely decline in sugar production in the current season.The order will come into force from January 18, a finance ministry notification said.

The purpose behind the move is to boost availability of molasses for domestic distilleries and help meet the government's ethanol blending target. In the current year, the government aims to achieve 15 per cent blending of ethanol with petrol.

Without diversion for ethanol, the government has estimated sugar production to decline to 32.3-33 million tonne in the ongoing 2023-24 season (Oct-Sept) as against 37.3 million tonne in the previous season.

Maharashtra, Karnataka and Gujarat are the three states which export molasses. India exports molasses to Vietnam, South Korea, the Netherlands and the Philippines.

The Union government last month banned the use of sugarcane juice for making ethanol, but later reversed the decision by allowing the use of sugarcane juice as well as B-heavy molasses to produce the green fuel but capped the diversion of sugar at 17 lakh tonnes.

Union transport minister Nitin Gadkari had recently assured sugar mill owners that a solution to their problems owing to the government's policy on the use of sugar for ethanol production will be found after April.

ISMA hails govt’s decision on molasses

Sugar body ISMA has welcomed the government’s order to levy 50 per cent export duty on ‘Molasses resulting from the extraction or refining of sugar’.

The India Sugar & Bio-energy Manufacturers Association said every year around 15-16 lac tons of molasses is exported, which accounts for almost 10 per cent of the total quantity of molasses produced. In ethanol terms, this molasses is worth around 38 crore ltr of ethanol.

According to ISMA President M Prabhakar Rao, “We had requested the government to completely stop the export of molasses with immediate effect as that will add to the country’s ethanol production, thereby reducing dependence on other feed stocks to some extent. In light of this, the move to levy 50 per cent export duty on molasses resulting from the extraction or refining of sugar is very welcome”.

Rao requested the government to consider increase in the procurement price of ethanol made from Sugarcane syrup/juice, B-Heavy Molasses and C-Heavy Molasses feed stocks by at least Rs.10/- per ltr for ESY 2023-24.