Sugar mills in Tamil Nadu expect to export over 1.85 lakh tonne molasses over the next few months. The State Government has cleared molasses exports after a gap of nearly five years. This follows the steep increase in sugarcane production and heavy output of molasses, which is a by-product during sugar production. To the sugar mills this represents a renewed revenue opportunity.
Sugar mills now have the option to sell molasses to other States and to exporters. Except in Tamil Nadu, where the price was artificially depressed around Rs 650 a tonne as molasses sale outside the State was not allowed, prices are buoyant. It ranges from about Rs 3,800-Rs 4,000 a tonne in Maharashtra, Rs 2,200-2,400 in Uttar Pradesh to about Rs 1,950 in Andhra Pradesh.
According to molasses exporters, there is good demand in the international market for molasses following a drop in sugarcane output in the leading production centres. The price ranges around $70-$100 (Rs 3,215-Rs 4,593) a tonne and the export markets are primarily in Europe and US.
Molasses is needed in distilleries and for manufacturing cattle feed. Indian prices are competitive because of the high sugarcane output during the season.
Sugar mills have crushed about 164.50 lakh tonnes as of May-end in Tamil Nadu, against 89 lakh tonnes same time last year, and many private mills are continuing sugarcane crushing into the special season which is expected to extend up to September.
During the extended season, the mills expect to crush anywhere between 30 lakh tonnes and 50 lakh tonnes of sugarcane more than during the special season. This will be restricted to the private sector mills, including EID Parry, Thiru Arooran Sugars, Sakthi Sugars, Rajshree and Dharani Sugars.
According to the sugar industry, the mills now make about Rs 650 a tonne on molasses. The decision to permit molasses exports comes at a time when mills had been concerned about the molasses output -- 12 lakh tonnes estimated for the 2005-06 season -- because storage is an environmentally sensitive issue.
With the 2006-07 season sugarcane production expected to be in excess of 20 lakh tonnes, molasses build-up would have posed a problem to the sugar mills if the Government had not permitted movement of molasses out of the State, according to sugar industry experts.
Tamil Nadu has traditionally protected molasses for potable alcohol production. The makers of Indian Made Foreign Liquor depend on the sugar mills for their raw material.