Earlier a ban on this process was imposed by the government on December 15, 2023, due to low sugar production estimates and rising prices of sugar.
The Director of Sugar in the Union Ministry of Consumer Affairs, Food, and Public Distribution issued the order lifting the restriction. This decision links to the agreements between the Food Ministry, the Petroleum and Natural Gas Ministry, and oil marketing companies (OMCs). Both ministries will closely monitor the diversion of sugar for ethanol production to balance it with domestic sugar supply needs.
In a separate move, the government has approved the allocation of 23 lakh tonnes of rice from the Food Corporation of India (FCI) stock for ethanol production. Ethanol producers will be able to participate in FCI auctions to purchase this rice, which can be used as feedstock.
Earlier FCI stopped selling rice for ethanol production due to rising prices. The government has set a target of 20 percent ethanol blending in petrol to 20 by 2025, which is at the level of 13 per cent as per the latest data.
To ensure sufficient domestic sugar supplies, the government has also maintained a ban on sugar exports, despite industry claims that there is adequate stock for export. The industry has called for the export ban to be lifted, citing expectations of better sugar production in the upcoming season. Government has also announced that he Food Ministry will continue to monitor sugar production in collaboration with the Petroleum Ministry to ensure a balanced approach to ethanol production and sugar supply.
