Newsflow of the last few days confirms sugar shortage. However, the hypothesis that the government will completely ban ethanol production based on Syrup/B-Hy Molasses seems extreme and might not be implemented. Why?
- Ethanol Year 23-24 targets 15% blending, and 70% of that demand’s procurement is forecasted from sugar based ethanol, which is almost entirely manufactured from Syrup and B-Hy Molasses. To cover for this much supply in a short span of time, activating alternative (plants and grains) sources seems impossible.
- It would be a bad policy decision – bad publicity to the ethanol mixing story, paralyzes ethanol industry infrastructure that was highly supported by the government till now, and chokes the quick source of earning for mills and in turn payment to the farmers.
A hybrid approach will be a better option- partial redirection from ethanol to sugar besides importing and subsidising the sugar.
Let’s see how it unfolds.
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