India's government is cautious about lifting the ban on B-heavy molasses (BHM) for ethanol production, amid concerns of potential sugar price increases. Despite recognizing the distilleries' argument for using BHM, the decision is delayed due to the election period. Distilleries have around 8 lakh tonnes of BHM stock, sufficient for producing about 25 crore litres of ethanol. The ethanol blending percentage with petrol is close to 12% in the current supply year, with the government expecting a sugar production of 310 lakh tonnes, ensuring adequate domestic availability.
The ban, implemented on December 7, 2023, aimed to prioritize sugar for domestic consumption, halting the use of sugarcane juice/syrup and BHM for ethanol. With the current stock of BHM and an anticipated surplus of 30 lakh tonnes of sugar this season, the government plans to convert the BHM stock into ethanol post-election, to alleviate price control pressures.
The ongoing ban on using B-heavy molasses (BHM) for ethanol production has placed distilleries in a challenging position, holding significant unused BHM stocks. This ban, aimed at prioritizing sugar availability for domestic consumption, has led to a stockpile of about 8 lakh tonnes of BHM. As the government contemplates the timing for lifting this restriction, post-election, the industry is advocating for the conversion of this stock into ethanol to avoid wastage and fulfill ethanol supply requirements, especially given the surplus sugar production projected for the season.