India Imposes 50% Duty On Molasses Exports To Secure Domestic Needs

New Delhi, Jan 16 (KNN) Indian government has introduced a 50 per cent export duty on molasses, a by-product of sugarcane to address the challenges posed by a sugarcane shortage triggered by unpredictable monsoon rains.

This measure, effective from Thursday as per a government order released late Monday, aims to regulate the supply and demand dynamics of commodities, ensuring a stable domestic availability of molasses.

The decision comes in response to appeals from various sugar industry associations, including the National Federation of Cooperative Sugar Factories Ltd, the West Indian Sugar Mills Association, and the South Indian Sugar Mills Association, who had proposed export restrictions on molasses in consultation with the food department.

As of November 30, India's ethanol production capacity stood at approximately 13.8 billion litres, with molasses-based production accounting for about 8.75 billion litres and grain-based production around 5.05 billion litres.

The current sugar production estimate for the ongoing crop year ranges from 29 to 30.5 million tonnes, surpassing the expected domestic consumption of 27.5 to 28 million tonnes.

This move to bolster domestic molasses availability aligns with recent measures such as restrictions on sugar exports and directives to mills to refrain from using cane juice for biofuel, a decision that was subsequently reversed.

The anticipation of a shortage in sugar supplies for domestic consumption has already led to a spike in sweetener prices, reaching a 14-year high.

India, the world's largest molasses exporter, accounting for approximately 25 per cent of global trade, primarily serves key markets such as the Netherlands, Philippines, Vietnam, South Korea, and Italy. Major molasses exporting states include Maharashtra, Gujarat, and Karnataka.

(KNN Bureau)