A win for fuel blending as govt weighs molasses export levy

livemint.com:

NEW DELHI : The government is considering a 50% duty on the export of molasses. The idea is to ensure enough supplies to meet the target for cleaner and more efficient ethanol-blended petrol, two officials aware of the matter said on the condition of anonymity. India is the world’s largest molasses exporter, contributing about 25% to global trade.

The country doesn’t currently levy an export duty on molasses, a by-product of the process of refining sugarcane into sugar, and a key ingredient in the production of ethanol, a biofuel. The government, though, has been considering the levy to discourage exports to ensure adequate molasses in the country, given the shortage of sugarcane following erratic monsoon rains. “In September, a proposal was made to impose a 30% export duty to discourage the export of molasses, but no decision was taken then," one of the officials said.

“Because of the recent development of limited availability of sugar-based feedstock for ethanol production and trends in international market prices of molasses, the food department has proposed imposing a 50% export duty." A decision is likely in January, the official added. Queries sent to the commerce and food and public distribution departments remained unanswered till press time. The efforts to boost domestic availability of molasses for ethanol production follow recent curbs on sugar exports and directions to mills to cease using cane juice for the biofuel, which was reversed later.