India is planning to discourage the diversion of sugar for ethanol production as part of efforts to ensure sufficient supplies of the sweetener in the local market, government and trade sources said. Lower diversion for ethanol will help the world’s second biggest sugar producer increase output of the sweetener, which is expected to fall because of below-normal rainfall in key growing states.
The Indian government could ask mills not to use sugar cane juice and B-heavy molasses – a byproduct with higher sucrose levels – to produce ethanol, the sources said. The government would allow mills to produce ethanol only from C-heavy molasses, a cane by-product that has hardly any sugar content left.
The new guidelines for ethanol procurement in the 2023-24 marketing year, which began Nov. 1, will be finalized soon and oil marketing companies are likely to honor contracts already awarded.
