Sugar industry worried as Centre halts ethanol purchase; Harshwardhan Patil seeks withdrawal of curbs

Bawda: The Centre has stopped the purchase of ethanol made from sugarcane juice, sugar syrup and B-heavy molasses at sugar mills for the 2026-27 supply year. This will reduce the mills' earnings from ethanol, and the sugar industry fears it will be in difficulty as a result. The concern was voiced by Harshwardhan Patil, former minister and president of the National Federation of Cooperative Sugar Factories, New Delhi.

Patil said the aim of the decision is stated to be to increase the availability of sugar within the country. Oil companies have accordingly stopped buying ethanol made by the mills from cane juice, sugar syrup and B-heavy molasses. The decision also says that the purchase of ethanol made from C-heavy molasses produced at the mills will continue.

However, according to Patil, the rate for C-heavy molasses is very low, only Rs 57.97 a litre. This has put the sugar mills in difficulty.

Patil said the Centre's decision will affect the financial planning of the mills. The mills' distillery divisions and their earnings will also be hit. Investment of Rs 40,000 crore has been made in ethanol production in Maharashtra and Rs 1 lakh crore across the country. The decision will also hurt ethanol production. Patil said it will also affect the recovery of loans from those who have lent money for ethanol projects.

Patil said ethanol is an issue that is transforming the country's economy, and the decision will therefore upset the entire financial calculation of the sugar mills. He has demanded that the Centre withdraw the decision to stop ethanol purchase, and that the rate for C-heavy molasses be raised to Rs 70 a litre. Harshwardhan Patil placed the demand before the Centre in his capacity as president of the federation.