New Delhi, Oct 1 (PTI) Announcing an incentive to encourage sugar mills to divert the commodity towards ethanol making, the government on Friday said it will allocate a quantity of sugar that is sacrificed for ethanol production for monthly domestic sale along with the regular quota from this month onwards.

The government has been fixing mill-wise monthly sugar quota since June 2018 in order to maintain the demand-supply position of sugar in the country, stabilise ex-mill prices of the sweetener and ensure sufficient availability for domestic consumption.

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The sugar quota is fixed on the basis of stocks held by them, export performance and diversion of sugar to ethanol.

In a statement, the Union Food Ministry said, "...incentive on sugar sacrificed for producing ethanol from B-heavy molasses/sugarcane juice/sugar syrup/sugar has been doubled from October 2021 onwards in their monthly release quota."

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This has been done with a view to encourage sugar mills to divert excess sugarcane/sugar to ethanol and to achieve targets of blending ethanol with petrol in line with 'Ethanol Blended with Petrol program', it said.

"Now, those sugar mills -- which will be diverting sugar to ethanol -- would be getting the entire quantity of sugar sacrificed on producing ethanol from B-heavy molasses/sugarcane juice/sugar syrup/sugar in their monthly release quota," it added.

The Centre is taking several steps for diversion of sugar to ethanol. In order to find a permanent solution to address the problem of excess sugar, the government is encouraging mills to divert excess sugarcane to ethanol. A target of 10 per cent blending of fuel grade ethanol with petrol has been fixed for 2022 and 20 per cent blending by 2025.

In a separate notification, the ministry has allowed 558 mills to sell 24 lakh tonnes of sugar in October, which is higher by 1 lakh tonnes in comparison to the quota allocated in the year-ago period.

Also, an extension of 30 days to sell the unsold stocks of September has been announced.

The country's annual sugar production is around 32-33 million tonnes, against the domestic consumption of 26 million tonnes.

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