Sugar sector targets 6bn litre ethanol output

Indian sugar producers intend to increase production of fuel additives like ethanol by 20 fold in the next three years to six billion litres.

"The aim is to increase ethanol production from 300 million litres to 6 bn litres in three years. The government should get out of regulation. Farmers should be able to sell to any mill of their choice and the mills should be able to sell the sugar whenever they please," Narendra Mukumbi, managing director of Sri Renuka Sugars, said at the Agricorp 2004 conference held here recently.

Only three per cent of arable land was under sugarcane. The industry clearly had some way to go become globally competitive and capture export markets.

Samir Somaiya, managing director of Godavari Sugar Mills Ltd, backed Mukumbi, saying, "India's move to blend five per cent ethanol in fuel is a first step in line with the worldwide move to use renewable resources for transportation. This should be increased to 10 per cent."

"The inability to penetrate the global sugar market shows lack of flexibility and diversification in sugar processing," said Murkumbi.

Brazilian exports soared in 2002-2003 after producers expanded their product range to make to fuel additives as sugar prices fell. The Brazilian government made 20 per cent addition to fuel mandatory, Ian Dixon, head of global research at Tate & Lyle International of UK, pointed out.

The sugar sector provided direct employment to 5,00,000 people and supported 45 million sugarcane farmers. Capital invested in the sector was around Rs 50,000 crore and annual sales around Rs 25,000 crore.