Triveni Engineering & Industries, country’s second biggest sugar producer will commission its two ethanol plants next month taking the company’s total capacity to 540 kilo litre per day (KLPD) from current 320 KLPD while targetting to further increase to 660 KLPD before start of next season.
“While the Muzafarnagar grain-based 60 KLPD distillery will be in addition to an already operational 160 KLPD (sugarcane-based) plant, the Milak Narayanpur unit of 160 KLPD will have interchangeable feedstock (grain and sugarcane) to produce ethanol,” said Tarun Sawhney, Managing Director, Triveni Engineering & Industries.
Sawhney said, after the ethanol blending programme (EBP) and the re-introduction of release order mechanism besides the export quota allocation, the country’s sugar sector has been stabilised and the sugar cycle may be broken as there was no shortage in last five years.
“The ethanol policy without the other two initiatives could not have worked that successfully,” Sawhney said.
Triveni Engineering, which secured an order to supply 9.14 crore litres in 2020-21 season (December-November), had supplied the entire quantity (up 13.3 per cent from year-ago) and this year it has already secured orders to supply 8.72 crore litres.
Commenting about sugar scenario, Sawhney said: “There was massive push for the EBP right from the top that ushered in a huge change in the sugar sector. The (re-introduction of) quota system has helped the sugar industry to have a very balanced growth as well as the profitability of mills seen in last few years. Besides, there were export incentives and this season the government has assured to provide benefits to mills in the domestic quota release based on their export performance.”
The oil marketing companies had purchased over 3 billion litres of ethanol across the country during 2020-21 (December-November) while the EBP rate went up to 8.1 per cent, against 1.73 billion litres and 5 per cent blending in the previous year.
Based on the recommendations of the C Rangarajan committee, the Centre in 2013 abolished the ‘levy quota system’ under which mills were mandated to sell to government at a fixed rate for enabling further distribution through ration shops at cheaper rates, and also removed the ‘release order mechanism’ under which mills are allotted quotas for open market sales. However, while the release order mechanism was re-introduced at the behest of industry from 2018, the levy quota was not touched.
Surplus sugar production
Sawhney said despite the country had overproduction of sugar for five years “we have not gone back to the old sugar cycle. How that has happened? He attributed the success of it to the ‘controls’ system of the government.
Earlier India used to have three years of surplus followed by two years of shortage as farmers were shifting from sugarcane due to unpaid dues during surplus years when mills were facing lower realisation from sugar sales. However, the government’s incentives to encourage mills to produce ethanol and other by-products, to set up co-gen plants over the years helped the sector.
Currently, the government control measures include sugarcane price at which mills buy from farmers, minimum sugar price at which mills are allowed to sell, area from where sugarcane is to be purchased, quantity to be sold every month as well as guaranteed buying of ethanol produced by mills at profitable rates.
“Our role as a sugar producer in the world has never been more important than now. India’s sugar export policy is possibly the most important determinate in global prices, especially in certain times of the year,” he said.
Union Food Secretary Sudhanshu Pandey on March 5 had said that India’s sugar exports would jump to 7.5 million tonne (mt) in 2022-22 sugar season (October-September) against previous estimate of 6 mt as globally there is a push towards ethanol after the increase in crude prices limiting sugar production. India’s sugar production has been consistently in surplus zone against demand from 2017-18. The output is expected to be 30.8 mt in current season, according to government estimates.