The Indian government is considering imposing a 25% duty on molasses exports to limit shipments and make them available to domestic distillers as sugar production could fall next season, reducing availability of molasses, a key raw material for ethanol production .
While the export tax proposal has been under discussion for some time, it is understood that the Treasury is now aware of its importance and may be notified soon, the source said.
An official source said: “This decision is important to check shipments as the target for ethanol blended with gasoline has been set at 15% for the 2023-24 season (November-October) compared to 12% for the current season. ”
The government has yet to release sugar production estimates for the next season (October-September), while the Sugar Mills Association of India forecast output at 31.68 million tonnes, down from an estimated output of 32.8 tonnes for the 2022-23 season.
Official data showed that molasses exports in the first quarter (April-June) of the current fiscal year stood at 2,83,598.19 tonnes worth Rs 3.61 billion, compared to 16,08,906.7 tonnes worth Rs 2,000 crore in 2022-23. 0.34 billion rupees. The main export season started in November after sugarcane crushing picked up, and by April most of the crushing in the top three molasses exporters, Maharashtra, Karnataka and Gujarat, was complete, industry officials said.
The country could have produced about 380 million liters of ethanol from molasses exported in the 2022-23 fiscal year, officials said. India mainly exports heavy carbon molasses, which typically contains 235 liters of ethanol per ton.
Countries such as the Netherlands, the Philippines, Vietnam, South Korea, and Italy are the top five destinations for Indian molasses for cattle feed production.
a welcome move
“If the government decides to restrict molasses exports, it will be a welcome step. There are already concerns about a drop in sugar production due to the August drought that affected sugar cane crops in Maharashtra and Karnataka. Maharasht Sugar mills in Labang investing in setting up distilleries to produce ethanol fear that they may not even be able to utilize 80% of their capacity,” said BB Thombare, president of the West Indian Sugar Mills Association.
However, a senior Maharashtra cooperative agency official said that while the Ethanol Blending Program (EBP) is a state scheme and should be given priority, the government should give equal consideration to the impact of the move on small businesses without sugar mills. Effect of sugar mills. Exports get better price realizations than selling molasses to the domestic industry.