The Indian Sugar Mills Association (ISMA) has raised urgent concerns about the financial stability of sugar mills and timely payments to sugarcane farmers, citing a significant reduction in ethanol procurement by oil marketing companies (OMCs).
Biofuel Blending Targets at Risk
The industry body warns that the sharp decline in ethanol offtake could severely impact India's ambitious ethanol blending program. The government's target of achieving 15% ethanol blending with petrol (E15) by 2025-26 now faces serious challenges due to this procurement slowdown.
Financial Strain on Sugar Mills
With reduced ethanol purchases, sugar mills are experiencing mounting financial pressure. Ethanol sales have become a crucial revenue stream for mills, helping them clear outstanding dues to sugarcane farmers. The current situation threatens to disrupt this financial ecosystem.
Farmer Payments in Jeopardy
The most immediate concern revolves around delayed payments to sugarcane growers. ISMA emphasizes that without regular ethanol procurement, mills will struggle to meet their financial obligations to farmers, potentially leading to widespread payment delays across sugarcane-growing states.
Industry Calls for Intervention
ISMA has urged government authorities and OMCs to address the procurement issue promptly. The association stresses the need for consistent ethanol offtake to maintain the financial health of sugar mills and ensure the success of India's biofuel program.
The situation highlights the delicate balance between agricultural sustainability, renewable energy goals, and the economic viability of India's crucial sugar industry.
