Government’s sweet dose for the sugar lobby in Maharashtra

Cap withdrawn on sale of key byproduct, millers to gain handsomely

Written by Sandeep A Ashar | Mumbai | Updated: November 27, 2016 1:42 am
Sugarcane, sugar, sugar extraction, Sugar sector, Maharashtra’s sugar sector, Maharashtra, Maharashtra sugar, BJp, Sugar producer, Devendra Fadnavis, Fadnavis, Maharashta CM Fadnavis, Maharshtra news, india news, indian express news The politically influential sugar lobby in the state had been up in arms over the cap, that was introduced by the department on May 2, 2015 and had restricted the release of surplus molasses.

Maharashtra’s sugar sector is all set to gain considerately with the state government further easing control of molasses for the production of ethanol. The excise department, led by BJP’s Chandrasekhar Bavankule, has decided to withdraw the existing cap on the surplus molasses gained during the extraction of sugar from sugarcane. Molasses is the dark, sweet, and syrupy byproduct of refining sugarcane.

The politically influential sugar lobby in the state had been up in arms over the cap, that was introduced by the department on May 2, 2015 and had restricted the release of surplus molasses, gained over and above the declared annual production, to five per cent.

Millers had claimed that the cap was adhoc and lacked any scientific basis as the production of molasses can vary depending on the variety and the manner of sugar extraction, along with the process used for the extraction of the byproduct.

Following their protest, the department has decided to withdraw the cap allowing the millers to release and sell molasses gained in surplus.

Chief Minister Devendra Fadnavis had announced decontrol of the byproduct on January 16 this year.

Sources said the move is expected to translate into a handsome gain for the sugar mills, especially since the sale price of molasses has risen sharply — from Rs 3,000 per tonnes to Rs 7,000 per tonnes.

Confirming the move, Excise Commissioner V Radha said about 1 lakh tonne of molasses was pending disposal across the state due to the cap. “We have decided to release it. But the mills have been asked to submit an affidavit confirming that they are aware about facing strict action if this was found to be misused or misdirected,” she said. Radha had held a meeting in this regard with the reprensentatives from the sugar industry and the state’s sugar commissionerate last week.

Formal orders regarding the withdrawal of the cap are expected to be issued soon. Industry sources said that the move will provide sugar mills a legalised mechanism for disposal and sale of surplus molasses. Maharashtra is the country’s largest sugar producer. It has about 194 sugar mills, most of which are controlled by senior politicians. Of these, nearly 100 have also set up distilleries for production of alcohol using molasses, while a few sell the molasses to nearby distilleries.

The release of the surplus old molasses is also expected to cushion the impact of an estimated shortage in its production this year. Sources said that the estimated availability of sugarcane this year stood at 445 lakh tonnes, that when crushed translates into just five million tonnes of sugar as compared to 8.5 million tonnes last season. The drop in sugar extraction will proportionately impact molasses production too, said sources. Following the rise in the molasses sale price, several sugar factories have stepped forward to report surplus gain of molasses. In fact, even three mills with linked distilleries, too, have applied for regularisation of gain in surplus, sources said.