【SCI View】Indian Sugar Mills Turning to Ethanol Production

Indian Sugar Mills Turning to Ethanol Production

It is reported that due to excess sugar production in the past few years, Indian sugar mills are gradually turning to ethanol production. According to officials of the Indian Sugar Mills Association, the sugar mills supplied nearly 300 million liters of ethanol to oil companies in crushing season of 2018/2019, which was equivalent to consuming about 300kt of sugar. Sugar mills planned to provide a total of 510 million liters of ethanol produced from molasses and cane juice in this crushing season, resulting in a reduction of 500kt in sugar production.

To address the problems caused by excess sugar production and falling sugar prices, the Indian government has been asking sugar mills to switch to ethanol production. To this end, state governments will shorten the approval time for sugar mills to produce ethanol.

In addition to the excess sugar production, the global sugar market situation is also one of the reasons why the Indian government supports sugar mills to switch to ethanol production. Brazil’s sugar price is 22 rupee/kg, while Indian sugar price is 32-34 rupee/kg, so no one wants to buy sugar in India which makes Indian sugar mills experienced losses continuously.

Brazil is the second largest ethanol producer after the United States, and only the two countries use ethanol on a large scale. Although India has surpassed Brazil to become the world’s largest sugar producer, it is learning from Brazil about the experience of switching from sugar to ethanol production.

A few months ago, the Indian government approved incentives worth of 33 billion rupees to help sugar mills improve ethanol production capacity. The government hopes that the conversion from sugar to ethanol will improve the financial situation of those sugar mills that suffer losses.

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