Commodities

Maharashtra lifts ban on inter-state sales, exports of molasses

Updated : June 30, 2020 06:27 AM IST

Between November last year till June, the stock of molasses in warehouses in Maharashtra have risen nearly 80%.

The Maharashtra government has lifted the ban on the sale of molasses to other states and countries with immediate effect. Molasses is the leftover slurry after the sugar has been extracted from cane, and is used mainly to make ethanol. In December, the state government had banned its sale to other states, and exports, till September 30 due to lower availability of cane output.

The price of molasses, which had hit a high of Rs 10,000 per tonne, has fallen to Rs 7500 per tonne now, and industry people said the prices would have fallen further had the state government not lifted the curbs on inter-state sales and exports.

Between November last year till June, the stock of molasses in warehouses in Maharashtra have risen nearly 80 percent to 543,000 tonnes.

On average, Maharashtra produced 3.5-4.0 million tonnes of molasses over the past few years of which 3.2 million tonnes was used by distillers to produce alcohol, and 250,000 tonnes were utilized as feed for livestock.

The immediate lifting of sale outside state and country comes in on the back of higher availability of the by-product. The industry has hailed the government’s move as timely, as they think a good monsoon and higher sowing will improve output incoming season. The industry estimates that the decision will lead to an export of 5-6 lakh tons of molasses from Maharashtra. Other states like Haryana, Punjab, Karnataka are also expected to export surplus molasses.

In the sugar season 2020-21, which runs from October to September, around 95 million tonnes of sugarcane juice is likely to be extracted, of which 3.6-3.8 million tonnes of molasses are likely to be produced, according to the estimates by the Sugar Commissioner office data.

The lockdown has led to lower demand for fuel and the ethanol blending demand from oil marketing companies has been low, leading to surplus stocks with the mills. Petrol consumption in April was slightly below 0.97 million litres compared to the monthly average of over 2 million litres.

In addition, demand for sugar too fell during March-April.

Oil marketing companies requirement of ethanol for blending is 511 crore litres while the offered quantity was 185 crore litres due to short crop in Maharashtra. The quantity lifted till mid-May was 64 crore litres compared to 100 crore litres during the same time last year says Rahil Sheikh of AISTA (All India Sugar Traders Association).

Maharashtra lifts ban on inter-state sales, exports of molasses

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