The industry wants the government to provide financial assistance to companies which aim to expand their ethanol production capacity, to help maintain profitability and liquidity of sugar mills, the executives said.
The government has asked domestic sugar mills to export 5 million tonnes in the 2018-19 season (October-September) to liquidate excess sugar stock in the country. “The industry has signed contracts for export of 1.5 million tonnes of sugar till date. The government is helping mills with financial assistance or subsidy. The need of the hour is to enforce the policy to get all mills to fulfil their individual export quotas,” said Abinash Verma, director general, Indian Sugar Mills Association.
“We understand it takes some time for the government to release the money but if some mills can export in the current environment, others too can and should.”
Verma said the industry has asked the government to clear a few more projects for ethanol production. “Around 256 applications were submitted for expansion and new ethanol production capacity, but only 114 projects have been approved for subsidised loans till now. More projects from applications already submitted should be cleared to raise the petrol-ethanol blend rate to 10 per cent and beyond, from the current estimated 7.5 per cent,” he said.
The association has asked the Centre to increase the ex-mill price to Rs 35-36 per kg, the current cost of sugar production. Sugar prices in Uttar Pradesh are Rs 31-31.5 a kg, and even lower in Maharashtra, at Rs 29 a kg.
Adhir Jha, managing director, Indian Sugar Exim Corporation, said the government should allow companies to export beyond their quotas and be compensated on a pro-rata basis.