Heavy crisis on sugar industry
When the government Ethanol blended petrol (EBP) Scheme was launched, its aim was to reduce the dependence on the import of fuel and make fuel cheaper by adding ethanol. At that time, this news was very good news for the sugarcane industry, because it gave the way of new income to the sugarcane mills. Initially, most of the ethanol produced from sugarcane, but now the situation has changed.
In 2014, when there was only 1.5% mixture of ethanol in petrol, it has now increased to 20%. It is true that the quantity has increased, but now a large part of this ethanol is made from crops like maize and wheat. At the same time, sugarcane stake has come down to only 27%, while the share of grain-based ethanol has reached 72%. According to an Economics Times report, In 2024-25, ethanol production from grain reached 650 crore liters, while sugarcane-based ethanol was just 250 million liters. According to NFCSF Due to this, the income of sugarcane mills has come down and they have come under financial pressure.
₹ 40,000 crore on the verge of drowning
According to the report, a lot of money has been invested in the last few years to make ethanol in the sugarcane industry. According to the report, since 2018, more than ₹ 40,000 crore has been invested and production capacity has increased by 140%. But the biggest problem is that ethanol prices are stable for the last three years, while sugarcane prices are continuously rising. Today, sugarcane mills have to pay more money to farmers for sugarcane, but the prices of ethanol and sugar remain at the same place. That is, the price of raw material has increased, but the prices of goods made from it are almost the same. In such a situation, if this situation does not change, then this investment can be useless.
ISMA official Deepak Balani said that “If the prices of raw materials rise and do not increase the finished product prices, how will the sugar mill run?” The government has recently given permission to make ethanol with sugarcane juice, syrup and melasses, but did not increase prices. Due to this, the pressure on the profits of the mills is increasing.
Most sugarcane mills are burdened with debt
Most of the small sugarcane mills are getting buried under the heavy burden of debt. Big companies have some support from making electricity and other businesses, but even the small mills are not able to meet their daily needs. Banks, who give loan to these mills, are also worried about this situation. If the price of ethanol does not increase, then these loans can become non-performing ie NPAs. Meaning, if you are unable to earn money, then how will they pay the bank’s loan. Apart from this, if the sugar production does not increase at the right price from sugarcane, then the stock of sugar will increase and its prices will fall, so that the farmers will also get caught in the problem of not getting their money.
Sugarcane mills expect help from the government
Experts say that the ethanol made from sugarcane next year may increase again because sugar yield is increasing and now sugarcane will be used more. But this will be possible only when the government will increase the price of ethanol. NFCSF President Hareshwardhan Patil says that the government should increase prices for the economic strength of sugarcane mills as soon as possible. JDU India Agritech MD Uppal Shah has also said that the government will review the prices of ethanol and sugar in the coming season. Shah also stated that it would be good for the mills not to depend only on sugar and ethanol, but also invest in areas such as power generation, making ethanol from other raw materials and also in areas such as biochemicals so that they can avoid financial crisis.