New Delhi-based Indian Sugar Mills Association (ISMA) is likely to conduct a meeting on Wednesday, March 12, to discuss aspects including ethanol rates for the next marketing season, sources told Zee Business. In January, the industry body urged the central government to consider a hike in ethanol prices when produced from sugarcane and B-Heavy molasses—a byproduct of sugar production used to make ethanol—in order to support the domestic sugar industry while ensuring timely payments to growers.
In the meeting, the industry body may discuss a raise in the current ethanol prices and a recently-announced scheme allowing cooperative sugar mills to access subsidized loans for transforming sugarcane-based ethanol distilleries into dual-feed units, according to sources.
The industry body seeks more clarity on the current sugar policy from the government.
Special scheme for cooperative sugar mills
Last week, the Department of Food and Public Distribution notified a scheme for cooperative sugar mills under a modified ethanol interest subvention scheme for the conversion of their existing sugarcane-based feedstock ethanol plants into multi-feedstock based plants to use grains like maize and damaged food grains (DFG).
Under this interest subvention scheme, the central government is facilitating entrepreneurs with interest subvention at 6 per cent per annum or 50 per cent of the rate of interest charged by banks or financial institutions, whichever is lower, on loans to be extended by banks or financial institutions. The central government will bear the applicable cost for five years including one-year moratorium.
The sugarcane crushing period is limited to 4-5 months only in a year due to which sugar mills can operate for a limited period of time. This further leads to reduction in their overall operational efficiency and productivity.
To ensure the functioning of Cooperative Sugar Mills (CSMs) throughout the year, their existing ethanol plants can be converted into multi-feedstock based plants to use grains like maize and DFG under the new modified scheme, according to the official statement dated March 7.
Ethanol Blended with Petrol
Meanwhile, the central government has been implementing its Ethanol Blended with Petrol (EBP) Programme throughout the country, under which it aims to achieve 20 per cent blending of ethanol with petrol by 2025.
