PTI New Delhi

The sugar industry on Tuesday welcomed the Centre's decision to remove quantitative restrictions on ethanol production from sugar for 2025-26, terming it a "jackpot for farmers" that will ensure timely cane payments and help keep sweetener prices under control.

The Food Ministry on September 1 issued a notification lifting the 4 million tonne cap on sugar diversion for ethanol production that was in place for the 2024-25 Ethanol Supply Year (ESY).

For ESY 2025-26, there will be no restrictions on ethanol production from sugarcane juice, sugar syrup, B-heavy molasses as well as C-heavy molasses.  This is in line with the Sugar (Control) Order 2025.

"It is a positive development considering higher sugar production next year. About 5 million tonne of sugar can be diverted for ethanol in 2025-26," Indian Sugar and Bio-Energy Manufacturers Association (ISMA) Director General Deepak Balani told PTI.

The move will help mills keep sugar stocks in balance as well as check prices and ensure timely cane payment to farmers, he added.

"We can say it is a jackpot for farmers as they will get cane payment much sooner," All India Sugar Trade Association (AISTA) Chairman Praful Vithalani said.

He explained that mills can now produce ethanol and receive quick payments from PSU refineries instead of selling sugar above monthly quotas for working capital during the season.