The sugar industry has been facing difficulties in making cane payments to farmers due to restrictions on exports and the government s decision to ban ethanol production from cane juice, the Indian Sugar Mills Association (ISMA) said in a statement.
The Indian government is likely to permit the diversion of 1.7 million tonnes of sugar for ethanol production, just days after instructing sugar mills and distilleries to cease using sugarcane juice and syrup for ethanol production in the 2023-24 supply year. The directive aimed to address concerns about lower sugarcane production due to adverse weather conditions and rising sugar prices in the domestic market.
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CRISIL has expected a 2.5 million-tonne increase in India s sugar production in 2023-24 due to a ban on using sugarcane juice for ethanol. The government s move immediately stops ethanol production from cane juice but permits it from B and C heavy molasses. With sugarcane supply issues, sugar mills face a choice between sugar and ethanol.