Govt considers 50% export duty on molasses

The government is considering a 50% duty on the export of molasses. The idea is to ensure enough supplies to meet the target for cleaner and more efficient ethanol-blended petrol, two officials aware of the matter said on the condition of anonymity.

- Puja Das

India is the world's largest molasses exporter, contributing about 25% to global trade. The country doesn't currently levy an export duty on molasses, a by-product of the process of refining sugarcane into sugar, and a key ingredient in the production of ethanol, a biofuel.

The government, though, has been considering the levy to discourage exports to ensure adequate molasses in the country, given the shortage of sugarcane following erratic monsoon rains.

"In September, a proposal was made to impose a 30% export duty to discourage the export of molasses, but no decision was taken then," one of the officials said. "Because of the recent development of limited availability of sugar-based feedstock for ethanol production and trends in international market prices of molasses, the food department has proposed imposing a 50% export duty." A decision is likely in January, the official added.