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Subsidized sugar cane for ethanol to be central issue in India-Brazil meeting

India has been providing transport subsidies of between 1,000 rupees ($14.59) a tonne to 3,000 rupees a tonne to sugar mills, depending on the distance to ports. The government has also raised the amount it directly pays to cane growers to 138 rupees a tonne in assistance, from 55 rupees a year ago, with no intention of halting the subsidies. But using more cane in India to produce ethanol, instead of sugar, could reduce the global supply of the sweetener, as Brazil has been doing for the last two seasons with cane allocation to sugar production hitting a record low of 35% in 2018-19.

Brazil is the second largest ethanol maker after the United States. Large-scale use of ethanol basically now takes place only in those two countries, despite efforts in the past to make ethanol an internationally traded commodity. Brazil is fighting India in the World Trade Organization because of sugar export subsidies. Brazil and India are expected to sign a memorandum of understanding on production and trade of ethanol when leaders of the two countries meet in Brasilia later this year. The suggestion to discuss a partnership on ethanol came from the Indian government, which has a target to gradually increase blending of ethanol to gasoline to up to 20%.

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From the April 2018 issue of Hydrocarbon Processing


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