Unlocking an additional revenue stream for the beleaguered domestic sugar sector, the central government has allowed for the export of alcohol-based hand sanitiser, a commodity in high demand globally to curb the covid-19 infection.
On May 6, the Centre had banned the export of alcohol-based sanitiser to maintain domestic market availability, although non-alcohol based sanitisers were allowed for shipments.
In his June 1 order, Director General of Foreign Trade (DGFT) Amit Yadav, who is also the ex-officio additional secretary in the Centre, notified for the export of alcohol-based hand sanitiser with immediate effect “in any other form/packaging” other than in containers with dispenser pump.
Hit by the slump in sugar demand following lockdown and consequent subdued realisations, the mills have run up huge farmers’ outstanding pertaining to the current sugar season 2019-20 with the mills in Uttar Pradesh alone accounting for Rs 15,000 crore and counting.
Recently, a few major private sugar millers had petitioned the Centre for allowing the export of alcohol-based sanitiser considering robust installed capacities and abundant production to serve the domestic market.
For example, the hand sanitiser manufacturing capacity in UP is to the tune of nearly 0.53 million litres a day, while the current production is only about 280,000 litres. Currently, 87 units in UP are commercially manufacturing hand sanitiser, of which 37 are standalone sanitiser plants, 27 sugar mills, 12 distilleries and 11 independent entities.
The mills, which have set up sanitiser facilities, include all the major private sugar companies, including Balrampur Chini, Birla, Dalmia, Dhampur, Uttam etc.
Talking to Business Standard, UP Sugar Mills Association (UPSMA) secretary Deepak Guptara welcomed the order saying it would certainly have a positive impact on the domestic sugar industry.
“There is high demand for hand sanitiser in the Indian subcontinent and our immediate markets, such as Sri Lanka. Besides, the hand sanitiser manufactured by the mills 80+ per cent pure although the World Health Organisation (WHO) norms mandate for 65+ per cent purity,” he added.
Some mills are manufacturing bulk quantities of sanitiser or supplying to other firms for bottling and marketing, a few others have signed contracts to supply ethanol/ethyl alcohol/extra neutral alcohol (ENA) to external plants.
While, sanitisers are generally manufactured with isopropyl alcohol (IPA), they have been found equally effective with ethanol/ethyl alcohol/ENA, which are sugar byproducts.
Since, the mills are focussed on production of hand sanitiser rather than marketing the commodity, they have been able to maintain the high purity ratio, Guptara said adding the mills have instituted substantial production capacity and the export is the way forward in addition to the domestic supplies.
Earlier, UP sugar industry and sugarcane development principal secretary Sanjay Bhoosreddy had said the sanitiser manufacturers were getting trade enquiries from foreign buyers, but the state was focussing on ensuring adequate supply in the domestic market before exports could be considered.
Although, the 2019-20 sugarcane crushing season is tapering off, the mills are likely to continue with sanitiser production, since they have abundant stock of ethanol/alcohol, especially UP.
So far, the UP based sanitiser units have collectively produced almost 9 million litres (ML), of which over 7.5 ML had already been supplied to the retail market, including other states.