India Slaps 50% Export Duty on Sugar’s Molasses

The Indian government has implemented a 50% export duty on molasses due to concerns about a potential decrease in domestic sugar production this season. The export duty, effective from January 18, 2024, aims to address the situation, as per an official notification from the Ministry of Finance.

Molasses, a by-product of sugar, is crucial for ethanol production, contributing to a greener economy. Cane juice-derived ethanol comprises 25-30% of the total ethanol production, while over 60-65% comes from B heavy molasses. Ethanol from C-heavy molasses and grains makes up the remaining share.

Earlier in December, the Food Ministry instructed sugar mills not to use cane juice or syrup for ethanol production. However, in mid-December, the central government permitted the use of both juice and B-heavy molasses for ethanol production, with a capped diversion of sugar at 17 lakh tonnes for the current marketing season.

India has already introduced 20% blended fuel, E20, in a phased manner starting April 2023, with wider availability anticipated in the coming days. The introduction of E20 blending in petrol aims to reduce the country’s oil import costs, enhance energy security, lower carbon emissions, and improve air quality. The government has advanced the target for E20 fuel adoption from 2030 to 2025.