Faced with molasses storage issues, the sugar industry has sought intervention of Petroleum Minister Veerappa Moily in speeding up the ethanol tendering process of oil marketing companies.
The Indian Sugar Mills Association in a letter to the Petroleum Minister has urged him to advise the OMCs to finalise the tenders at the earliest so that the factories could begin supplies.
The Government, on January 2, had notified the mandatory five per cent blending of ethanol with petrol to be achieved by June 30.
The OMCs had floated tendersin January for which the sugar millers had submitted their bids by January 28.
However, the delay in finalisation of tenders by OMCs has left the millers worried as the sugarcane crushing enters the last phase of the 2012-13 season.
Commitment
“Due to the delay, the industry has not been able to supply even one litre of ethanol in the current season. The delay has not only created storage issues as over 80 per cent of the molasses has been produced, but has also affected the cash flows for the millers,” said Abinash Verma, Director General, ISMA.
The industry has so far produced about 8.8 million tonnes of molasses this season. For every 100 kg of sugar produced, about 45 kg of molasses is generated as a by-product, ISMA says. So far, the country has produced 19.5 million tonnes of sugar in the current season.
Each tonne of molasses yields on an average of 250 litres of rectified spirit or alcohol or ethanol.
In the current sugar year, the industry has committed to supplying 55 crore litres of ethanol, while the actual requirement of the OMCs is estimated at 105 crore litres.
About half of the estimated 250 crore litres produced is used for production of potable alcohol.
Supplementary tender
Since this was the first year of e-tender procurement and as several factories couldn’t complete all their formalities, ISMA urged the Ministry to come up with a supplementary tender. The delay in tender finalisation has also led the factories to commit their molasses supplies to other uses like cattle feed and production of industrial alcohol, among others.
Some factories in Maharashtra have reportedly exported certain quantity of molasses to the European Union for cattle feed.