The government has made a decision to increase the availability of molasses for ethanol production in the country. An announcement has been made by the government regarding a 50% increase in export duty on molasses, effective from January 18. The government emphasizes that this decision to raise export duty on molasses is aimed at boosting the availability of molasses for ethanol production.
In addition, there will be a reduction in import duties on edible oils. The government has extended the exemption on import duty for edible oils for one year, valid until March 2025. Relief has been provided on the import of crude palm oil, sunflower oil, and soybean oil. It is noteworthy that the import duty exemption was scheduled to end in March 2024. India is the largest importer of edible oils in the world. In 2023, a 5% reduction in import duty was implemented for refined soybean and sunflower oil, bringing the duty down from 17.5% to 12.5%.
It is worth noting that the announcement of a reduction in import duty was made in June of the previous year. The highest imports of palm oil come from Indonesia and Malaysia, while soybean oil is imported from Argentina, and sunflower oil is imported from Ukraine and Russia.
Neerav Desai from GGN Research mentioned that a decision has been made on edible oils considering the upcoming elections. The government aims to prevent inflation before the elections. He stated that the government is unlikely to make any major decisions for the next 6-9 months. Post-election, decisions can be expected in favor of the farmers. The weather is favorable for yield, and farmers have a stock of 14-15 lakh tons of mustard. There is a good stock with farmers, NCCF, and NAFED. The prices of soybean and palm are similar. Production has decreased in Brazil compared to last year. Delay in sunflower oil shipment is expected due to the Red Sea issue. He mentioned that prices of edible oils are relatively lower, and there is not much expectation of a rapid increase.
Export duty increased on molasses
In significant news related to sugar, the central government has made a decision to increase the availability of molasses for ethanol production. The government has announced a 50% increase in export duty on molasses, effective from January 18. The government’s decision to raise export duty on molasses is aimed at boosting the availability of molasses for ethanol production.
It should be noted that molasses is used for ethanol production. Molasses is a by-product of sugarcane. It is used in the alcohol and paper industries. India is the world’s largest exporter of molasses, accounting for 25% of global trade.
The states that export molasses from India include Maharashtra, Gujarat, and Karnataka. India primarily exports molasses to Thailand, Netherlands, South Africa, UK, and the Philippines. It is estimated that 225 crore liters of ethanol will be produced from C-heavy molasses. An estimate of 30 crore liters of ethanol production is expected from exported molasses.
Prakash Naiknavare from NFCSF stated that the government’s decision on molasses is appropriate. Ethanol production uses various feedstocks, and the remaining molasses will be utilized in ethanol production. He mentioned that the reduction in sugarcane production was due to El Nino. Prakash stated that there is hope for improvement in sugarcane production in Maharashtra and Karnataka. He further mentioned that the target of 11% ethanol blending was achieved in 2023, and a target of 15% blending has been set for 2024. Today, the sugar industry and the government will review the sugar policy.
