The export duty is explained as a strategic move to address the sugarcane shortage caused by erratic monsoon rains. The government aims to regulate the supply and demand of commodities and ensure domestic availability in the election year.
Beginning Thursday, the government has effected a duty on the export of sugarcane molasses. India is the world’s largest molasses exporter and contributes about 25 per cent to global trade.
“Erratic monsoon rains and the likelihood of a shortfall in domestic sugar production have led the the Indian government to impose a 50 per cent export duty on molasses,” a source familar with the development told OWSA.
This is explained as a strategic move to address the sugarcane shortage caused by erratic monsoon rains. The government aims to regulate the supply and demand of commodities and ensure domestic availability in the election year.
Molasses is used in the production of ethanol to promote a green economy. India is the world’s largest molasses exporter and contributes about 25 per cent to the global trade of molasses. Key buyers include the Netherlands, Philippines, Vietnam, South Korea, and Italy, with major exporting states being Maharashtra, Gujarat, and Karnataka.
Among the total ethanol produced in the country, up to 30 per cent comes from cane juice, while over 60 per cent is derived from B heavy molasses. Ethanol from C-heavy molasses and grains accounts for the remaining percentage.
In early December, the Food Ministry directed sugar mills not to use cane juice or syrup for ethanol production. However, in mid-December, the central government allowed the utilization of both juice and B-heavy molasses for ethanol production, with a capped diversion of sugar at 17 lakh tonnes for the current marketing season.
India has already introduced 20 per cent blended fuel in a phased manner since April 2023, with widespread availability expected in the coming days. The introduction of E20 blending in petrol by the centre aims to reduce the country’s oil import cost, enhance energy security, lower carbon emissions, and improve air quality. The government advanced the target for E20 fuel from 2030 to 2025.
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