Indicating a major shift in the domestic sugar value chain, sugar diversion into ethanol production has jumped 30 percent in the current crushing season 2022-23.
According to the Indian Sugar Mills Association (ISMA), domestic ethanol diversion till Feb 28 touched 2.85 million tonnes (MT) in the current cycle compared to 2.19 MT during the corresponding period last year.
India’s sugar production has also increased from 25.3 MT last year to 25.76 MT till Feb 28, 2023.
Without ethanol diversion, the domestic sugar production by now would have hit the level of 28.61 MT in the ongoing crushing season.
Meanwhile, 467 sugar mills in the country are still participating in the crushing operations, down from 484 last year till Feb 28. The rest of the units have closed down for the season.
The number of operating mills in the three major sugar producing states viz. Uttar Pradesh, Maharashtra and Karnataka are 113, 180 and 52 respectively, while the remaining states of Gujarat, Bihar, Punjab, Haryana etc account for an additional block of 122 mills.
Over the past few years, the Centre in consonance with the states has been promoting the ethanol sector to not only leverage the growing chorus for greener fuel resources but also to provide a lucrative and sustainable economic value chain to sugarcane farmers.
Ethanol also insulates the farmers and the sugar sector from the cyclical nature of the market forces, while cutting down on the steep oil import bill since ethanol if blended with fossil fuels, of which a major part is imported by India.