Opinions Focus
- India will have 1.3m tonnes molasses for export in 2023.
- This is dependent on the local cane harvest.
- It’s also dependent on how much is diverted to make ethanol.
Indian sugar and molasses production is key for the global molasses market. India is forecast to have 1.3 million tonnes of cane molasses available for export in 2023 and is a pivotal supplier to the global molasses market. Indian cane molasses will be the predominant origin to supply Europe and is also important in the importing markets in Asia.
Cane molasses supply is forecast to remain at a similar level to 2022, with in excess of 1 million tonnes available for export. The main threat to cane molasses exports is the growing ethanol demand in India, with a Government plan to reach an E20 level in India. This week it was announced that the GST rate on ethanol would be reduced from 18% to 5% in an attempt to support domestic ethanol demand. Sugar, molasses and corn are all important feedstocks for ethanol production in India, therefore the level of ethanol demand and production needs to be monitored closely.
The large surplus of sugar available for export from India is another potential source for ethanol feedstock and it remains to be seen exactly how that surplus is utilised. There is an incentive to export as sugar with the increase in raw sugar prices and also an incentive to convert to ethanol for domestic consumption.
In the short/medium term it does appear that cane molasses exports should remain viable from India and the longer-term development of ethanol, E20 blending levels and ethanol substrates mixes in India needs to be closely observed.
