Government Plans to Boost Sugar Use in Ethanol Production

18-Aug-2025 03:09 PM

Mumbai. The central government has planned to allow the use of 40-50 lakh tonnes of sugar for the production of ethanol during the marketing season of 2025-26 (October-September) so that there is no shortage of raw material in its production.

But industry experts say that the success of this plan of the government will depend on two things. Firstly, it will be necessary to see what is the scenario of domestic production of sugar and secondly, how much increase is made in the selling price of ethanol as it is yet to be revised.

Last week, the Joint Secretary (Sugar Cell) in the Union Food Ministry had said that during the next marketing season, the industry has estimated the use of 50 lakh tonnes of sugar in ethanol production and the actual quantity of its use is expected to reach between 40-50 lakh tonnes.

The Joint Secretary said that the domestic production of sugar is expected to be very good during the 2025-26 season and this estimate is based on that.

According to the preliminary estimate of the industry body - Indian Sugar and Bio Energy Manufacturers Association (ISMA), the gross production of sugar can increase by 18.3 percent to 349 lakh tonnes in the 2025-26 marketing season because the quality of sugarcane will be better and its yield rate will improve due to favorable weather conditions. How much sugar will be used in ethanol production out of this - it remains to be seen.

But there is also a point to be cautious in this. The government does not have the exact data of domestic production of sugar and it only keeps the data of sugarcane sowing area.

According to a leading industry analyst, the actual data of sugarcane sowing area at the government level will come out by the end of September when it will receive its data from the Sugarcane Commissioner of the major producing states. Meanwhile, some difference may remain between industry and government data.

Industry analysts have cautioned that initial sugar production estimates are not reliable and may differ significantly from actual production. The data of the last two years is a testimony to this.

The actual production of sugar for the 2024-25 season was much lower than the initial estimate. In contrast, the actual production of sugar in the 2023-24 season was higher than the earlier estimate.