₹500-cr fund mooted for ethanol pro­duc­tion in Ma­ha­rash­tra

The Hindu Business Line - - COMMODITIE­S - RAHUL WADKE

The Sugar Com­mis­sioner of Ma­ha­rash­tra has rec­om­mended to the State gov­ern­ment that ₹500 crore be made avail­able to co­op­er­a­tive sugar mills in the State for de­vel­op­ing in­fra­struc­ture and cre­at­ing ca­pac­ity for ethanol pro­duc­tion.

Sugar Com­mis­sioner Shekhar Gaik­wad told Busi­nessLine that due to ex­cess sug­ar­cane on the ground, the sugar in­ven­tory has been pil­ing up and it can last up to next two-and-half years in Ma­ha­rash­tra. But due to depressed in­ter­na­tional prices of sugar, pay­ing Fair and Re­mu­ner­a­tive Prices (FRP) to the farm­ers has also be­come a chal­lenge.

Al­ter­nate use of cane

Sugar con­sump­tion over the years is bound to re­duce be­cause of health rea­sons. There­fore, other uses of sug­ar­cane have to be found. Ethanol can be the an­swer by di­rectly pro­cess­ing the sugar juice in the mill for ethanol pro­duc­tion, he said.

Gaik­wad said that with ethanol pro­duc­tion, it would be pos­si­ble for mills to pay the FRP to farm­ers.

For sugar mills with cane crush­ing ca­pac­ity of 500 tonnes per day, about ₹48.49 crore will be the project cost. For big plants with 2,000 tonnes per day ca­pac­ity, the cost will come to about ₹126.85 crore.

Out of the to­tal project cost, 30 per cent could be con­tributed by State gov­ern­ment as eq­uity, 10 per cent will come from the mill and the rest from banks and fi­nan­cial in­sti­tu­tions. A de­tailed pre­sen­ta­tion has been made to Chief Min­is­ter Deven­dra Fad­navis.

The Sugar Com­mis­sioner pointed out that in the sugar sea­son for 2017-18 and 2018-19, the coun­try-wide pro­duc­tion has been above 320 lakh tonnes a year but the sale has been only 260 lakh tonnes. Ex­cess in­ven­tory is putting pres­sure on sugar prices.

Due to the Fair and Re­mu­ner­a­tive Price (FRP) or­der of the Cen­tre, mills have to pay the FRP rates to farm­ers, which has re­sulted in sugar price of ₹3,100 per quin­tal in the mar­ket. But in the in­ter­na­tional mar­ket, the prices are ₹1,900 per quin­tal.

As a re­sult, the mills in the State, who draw about 80 to 85 per cent of the rev­enue from sugar sale, find it dif­fi­cult to pay FRP to farm­ers. Rest of the rev­enue is drawn from co-gen­er­a­tion and other sources. The in­crease in area un­der sug­ar­cane, plant­ing of new sug­ar­cane va­ri­eties, which have higher sugar con­tent, and ad­vanced tech­nol­ogy have re­sulted in higher sugar out­put in the State but the mills are in­cur­ring losses, he said.

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