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India levies 50% export duty on sugar-derivative molasses

January 17, 2024 3:29 PM IST

molasses | molasses export | sugar

The Indian government has imposed a 50% export duty on molasses due to the potential decrease in domestic sugar production this season. According to an official notification from the Ministry of Finance, the proposed export duty will take effect on January 18, 2024.

This decision, announced late on Monday, is a strategic move to address the sugarcane shortage caused by erratic monsoon rains, aiming to regulate the supply and demand of commodities and ensure domestic availability.

What is Molasses?

Molasses is a thick, dark syrup produced as a byproduct of sugar refining from sugar cane or beets. It has a rich, sweet flavour and is used as a sweetener, flavoUring agent, and in the production of ethanol to promote a green economy.

World’s Largest Exporter

India is the world’s largest molasses exporter and contributes about 25% to global trade. Key buyers include the Netherlands, Philippines, Vietnam, South Korea, and Italy, with major exporting states being Maharashtra, Gujarat, and Karnataka.

Among the total ethanol produced in the country, 25-30% comes from cane juice, while over 60-65% is derived from B heavy molasses. Ethanol from C-heavy molasses and grains accounts for the remaining percentage.

In early December, the Food Ministry directed sugar mills not to use cane juice or syrup for ethanol production. However, in mid-December, the central government allowed the utilization 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 in a phased manner since April 2023, with widespread availability expected in the coming days. The introduction of E20 blending in petrol by the Centre aims to reduce the country’s oil import cost, enhance energy security, lower carbon emissions, and improve air quality. The government advanced the target for E20 fuel from 2030 to 2025.

(Inputs: ANI)

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