In a normal sugar season (October-September), production of sugar in the country is around 320-330 lakh tonne as against the domestic consumption of 260 lakh tonne, she said.
Due to surplus production, the minister said the ex-mill prices of sugar remain subdued resulting in cash loss to sugar mills. This excess stock of 60-70 lakh tonne also leads to blockage of funds and affects the liquidity of sugar mills resulting in accumulation of cane price arrears of farmers.
“In order to find a long-term solution to deal with the problem of sugar, Government is encouraging sugar mills to divert excess sugarcane to ethanol which is blended with petrol, which not only serves as a green fuel but also saves foreign exchange on account of crude oil import,” Jyoti said.
The revenue generated from sale of ethanol by mills helps sugar mills in clearing cane price dues of farmers, she added.
“In past three sugar seasons 2017-18, 2018-19 and 2019-20, about Rs 22,000 crore revenue was generated by sugar mills/distilleries from sale of ethanol to OMCs which has helped in clearing cane price arrears of farmers.
“In current ethanol supply year (December-November), about Rs 15,000 crore revenue is likely to be generated by sugar mills from sale of ethanol to OMCs,” the minister said.
In the last two sugar seasons 2018-19 and 2019-20, about 3.32 lakh tonne and 9.26 lakh tonne of sugar were diverted to ethanol, respectively. During the current sugar season 2020-21, more than 20 lakh tonne is likely to be diverted.
“In the next season 2021-22, about 35 lakh tonne of sugar is estimated to be diverted and by 2025 about 60 lakh tonne of excess sugar is targeted to be diverted to ethanol, which is likely to solve the problem of excess sugarcane/sugar,” the minister said.