Indian sugar mills association

Maharashtra: Sugar millers likely to start operations, plan to convert stock to ethanol

Date:	06 Sep 2019

Source:	The Indian Express

Reporter:	Partha Sarathi Biswas

News ID:	42625

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Sugar millers in the drought affected Marathwada and Aurangabad areas of the state, who had decided not to start operations, are likely to take season this year to convert their sugar stock into ethanol. Bhairavnath B Thombare, president of the West Indian Sugar Mills Association, said at least 30-32 of the 47 mills in Marathwada will operate their distillery units to produce ethanol.

Maharashtra had reported 8.43 lakh hectares (lh) of cane area in 2019 as against the 11.43 lh of area reported for the season in 2018. The decrease in area was highest in Marathwada, from 2.55 lh in 2018 to 1.52 lh in 2019. Similarly, Solapur (1.97 lh to 0.97 lh), Ahmednagar (1.34 lh to 0.70 lh) and Pune (1.41 lh to 1.10 lh) had reported reduction in cane area.

Mills in Marathwada had decided to keep their operations shut due to the paucity of cane. It was estimated that of the 47 mills in the region, only 10 would commence operations this season.

However, the push towards ethanol production, especially with the government allowing conversion of sugar to ethanol, has boosted the confidence of the industry. Most millers now say they would opt for converting sugar to ethanol.

“Instead of allowing sugar stock to remain idle, mills will be converting it to ethanol and selling to oil companies at a price of almost Rs 60 per litre,” said Thombare.

The Osmanabad unit of Thombare’s Natural Sugar and Allied Industries, which was going to remain shut, will start its distillery unit in November to take advantage of the scheme. Such conversion, Thombare said, will not require permission or crushing licence from the sugar commissioner.

Till date, at least 165 mills have logged into the online system to get the crushing licence, with 90 mills starting the process for obtaining it in the state.

Mills have to process a mixture of 80 per cent sugar with 20 per cent molasses to produce ethanol, Thombare said. Molasses is the liquor left after crystallisation of sugar with 40-50 per cent of fermentable sugar. “We will purchase the required amount of molasses from mills that have taken season and use it to produce ethanol,” he said. This process, Thombare said, will help them generate liquidity and reduce their inventory.

Due to a back-to-back bumper crop, the country has a carry over stock of more than 145 lakh tonne for the upcoming season of 2019-20. While sugar prices have increased by Rs 100-120 per quintal over the past few days, millers and traders have ruled out the possibility of sustained price rise. Mukesh Kuvadiya, secretary of the Bombay Sugar Merchants Association, said the present ex-mill price of Rs 3,200-3,240 per quintal is mostly due to the lower quota for August.

“It was expected that the government will allow export quota of 20-21 lakh tonne but only 19.5 lakh tonne quota was allowed. This has increased the prices,” he said. The price rise, he said, will not be permanent over the coming days.

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