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Directorate of Sugar & Vegetable Oils (DS&VO)

Directorate of Sugar and Vanaspati was part of erstwhile Food Department of pre-independence era. The Food Department was re-designated as Ministry of Food on 29th August, 1947. In November, 1976, the Directorate of Sugar and Vanaspati was bifurcated, with Directorate of Sugar remaining with the Department of Food, while the work relating to vanaspati, vegetable oils and fats etc. was transferred to the Ministry of Civil Supplies and Co-operation. 

In August, 2014, the erstwhile two Directorates viz. Directorate of Sugar and Directorate of Vanaspati, Vegetable Oils & Fats have been merged with a single entity as Directorate of Sugar and Vegetable oils.  

Directorate of Sugar & Vegetable Oils is responsible for implementation of policies regarding relating to sugar and edible oil sectors, particularly the availability of sugar and edible oils and monitoring their prices. 

DS&VO maintains data relating to production, distribution and consumption of sugar. Besides, the Directorate provides technical inputs for formulation of policies relating to sugar sector. It is also entrusted with the maintenance of data relating to cane price payment position, development and regulation of sugar industry and supply of sugar under public distribution system (PDS). Further, Cabinet Secretariat vide notification dated 02.11.2018 has amended the Allocation of Business (AoB) Rules, 1961 and the subjects molasses; alcohol-industrial and potable from the molasses route; and Stand-alone distilleries have been allocated to DFPD and are being handled in DS&VO. This Directorate also assists the Department in management of edible oils sector. 


In pursuit of mandated objectives, the important activities/functions of the Directorate of Sugar & Vegetable Oils are as follows:-

·         Assessment of the Domestic supply - demand situation, international trends, price situation and export / import policy adjustments. 

·         Enforcement of  Fair and Remunerative Price (FRP) for sugarcane through States / UTs.

·         Enforcement of minimum distance criteria for establishing new sugar mills.

Cane area reservation issues requiring Government of India’s intervention. 

·         Administration of sugar subsidy for PDS to AAY families by States/ UTs.

·         Fixation/finalisation of old levy price fixation and margins of retailers and whole sellers.

·         Issuance of mill-wise monthly release quota for domestic sale

·         Industrial Entrepreneurs’ Memorandum (IEM) related matters for establishing of new sugar factory.

·         Monitoring of domestic wholesale, retail and international prices of edible oils on daily basis.

·         Recommending policy intervention required for maintaining sufficient availability of edible oils at reasonable prices.

·         Providing inputs on matters related to edible oils and oil seeds.

·         Registering of edible oil manufacturing units under the Vegetable Oil Products Production and Availability (Regulation) Order 2011 and issuing Registration Certificate.

·         Operationalisation and maintenance of P-II, a web based on line monitoring system for data on sugar production/dispatch/export and production of ethanol from B-heavy molasses 

·         Compilation of weekly sugar production data.

·         Preparation of weekly provisional report on production, dispatches, stock of sugar etc.  

·         Compilation of annual data on cane crushed, production of sugar etc.

·         Compilation of data on estimates of production in the ensuing sugar season furnished by State Govt./Individual sugar mills.

·         Preparation of fortnightly reports on cane price payable, cane price paid and cane price arrears, based on the information received from the State Govt. /sugar mills for each fortnight.

·         Allotment of Code No. and Short name to the sugar mills. 

·         Fixation of norms/review of International Agreements relating to sugar.

·         Matters relating to payment of Annual contribution for Membership to ISO.

·         Keeping record of pending levy obligation of sugar mill and court case in this regard.

·         Matters relating to Administration of Levy Sugar Supply (Control) Order, 1979 and Sugar Price (Control) Order, 2018 and imposition of stock holding limits of sugar mills.

·         Various schemes in the form of policy interventions by the Govt. in sugar sector are also implemented and administered by the Directorate of Sugar and Vegetable Oils. 

·         All matters relating to the production of Ethanol.

·         Monitoring of Ethanol production in the country.

·         Coordination with Sugar mills, Distilleries, their Associations and Government for resolution of issues. 


Part A:- SUGAR

Sugar Industry is an important Agro-based industry that impacts rural livelihood of about 5 crore sugarcane farmers & their families & around 5 lakh workers directly employed in sugar mills & other ancillary activities.

Sector-wise position of sugar mills.

There are 756 installed sugar factories in the country as on 30.11.2021, with sufficient crushing capacity to produce around 350 lakh MT of sugar. The capacity is roughly distributed equally between private sector units and co-operative sector units. The capacity of sugar mills is, by and large, in the range of 2500 TCD-5000 TCD bracket but increasingly expanding and going even beyond 10000 TCD. Two standalone refineries have also been established in the country in the coastal belt of Gujarat and West Bengal which produce refined sugar mainly from imported raw sugar as also from indigenously produced raw sugar. Out of 756 installed sugar mills, 522 mills are operational and operated in sugar season 2021-22. The sector-wise break-up of sugar mills in the country is given below:- 

Sector-wise break up of operative sugar mills



Production of Sugar

Sugar production in India had been cyclic in nature. Every 2-3 years of high sugar production were followed by low sugar production. However, from the sugar season 2017-18 and onwards, the country has produced surplus sugar than the domestic requirement of about 250-265 Lakh Metric Tonnes. The sugar Season-wise production of sugar from 2017-18 and onwards is as below:-


Export of Sugar


India is now structurally sugar surplus country and is also exporting sugar to other countries. During last sugar season 2021-22, India has exported around 110 LMT of sugar.  In the current sugar season 2022-23, Government of India has allocated a quantity of 60 LMT of sugar for export to the sugar mills across the country and it is expected that the whole quantity will be exported by sugar mills.

It may be noted that in order to prevent uncontrolled export of sugar & with a view to ensure sufficient availability of sugar for domestic consumption at a reasonable price, Directorate General of Foreign Trade (DGFT), Ministry of Commerce vide notification No. 10/2015-20 dated 24.05.2022 has amended export policy in respect of sugar and covered it under restricted category w.e.f. 01.06.2022 for 2021-22 sugar season. Government has also decided to allow export of sugar upto a reasonable limit w.e.f. 01.11.2022 till 31.10.2023 for the current sugar season. Further, DFPD allocated an export quota of 60 LMT to sugar mills for sugar season 2022-23 w.e.f. 01.11.2022 along with the guidelines for the export of sugar. As per information published by DGCIS, Kolkata, the export of sugar from sugar season 2016-17 and onwards is given below:-


Import of Sugar


It may be noted that the import is of raw sugar by refineries for refining the imported raw sugar and re-exporting the same under Advance Authorisation Scheme (AAS). The import is not meant for domestic consumption. As per information published by DGCIS, Kolkata, the import of sugar from sugar season 2016-17 and onwards are given below :-


Closing stocks of Sugar

The closing stocks of sugar at the end of each sugar season from 2017-18 and onwards is given below :


Sugar Balance Sheet

The details of estimated carry-over stocks, production, imports, export, availability, estimated internal consumption, closing stocks for the last five seasons and current sugar season are as under :-


Ex-mill & Retail Prices of Sugar


The range of ex-mill & retail price of sugar (S-30 Grade) in the major centers of the country from sugar season 2017-18 to 2022-23 are as under :-


Cane Price Arrears

The payment to sugarcane farmers by sugar mills, though statutorily supported by various statutes and enforced by State Governments, get affected by the dynamics of domestic  market  price as well as international situation related to export possibilities. The sugar production in the country has been more than domestic requirements for consecutive five sugar seasons from 2010-11 onwards except during 2016-17 when the production was though low but the total availability of sugar including huge carryover stocks, was sufficient to meet the domestic requirement. Due to surplus sugar production, the prices of sugar had been subdued in the domestic market, adversely affecting the liquidity of the sugar mills and their ability to pay the cane dues to the sugarcane farmers in time. Consequently, the Government has implemented various schemes to increase the liquidity of the sugar mills so that the cane price arrears could be kept to a minimum during these seasons. 

In current sugar season 2022-23, it is expected that approximately 45 LMT of sugar would be diverted to ethanol.  By 2025-26, it is expected that all the excess sugar to the tune of around 60 LMT annually would be diverted every year to ethanol production which would check depressed sale of sugar and would result in product diversification. It will also improve the cash flow of sugar mills thereby facilitating in timely cane payment. To increase production of ethanol, new feed-stocks. Viz. Rice available with FCI and maize has also been introduced.  Production of ethanol from maize and FCI rice would benefit farmers across the country as the farmers would get better price of their produce.

The position of cane price payments and arrears during last four sugar seasons and current sugar season 2022-23 are as under:-




#E$tab_8(Revised guidelines vide letter dated 2nd June, 2017)

Sugar was being distributed through the Targeted Public Distribution System (TPDS) by the States/UTs at subsidized prices for which the Central Government was reimbursing them @ 18.50 per kg. The scheme was covering all BPL population of the country as per 2001 census and all the population of the North Eastern States / special category/ hilly states and Island territories. 

The National Food Security Act, 2013 (NFSA) is now being universally implemented by all 36 States/UTs. Under the NFSA, there is no identified category of BPL; however, the Antyodaya Anna Yojana (AAY) beneficiaries are clearly identified.  As such, with a view to give access to consumption of sugar as a source of energy in diet for the poorest of the poor section of the society i.e. AAY families, it has been decided to continue with the existing scheme of supply of subsidized sugar through PDS for restricted coverage of AAY families for providing 1 kg of sugar per AAY family per month. Besides, the Government has continued with the current level of subsidy at Rs. 18.50 per kg for reimbursing the participating States/UTs for distribution of sugar through PDS. 23 States/UTs are participating in this scheme in the current financial year 2021-22.     


With a view to enhance ethanol production capacity in the country, Government in July, 2018 & March, 2019 and subsequently in September, 2020 and in January, 2021 notified interest subvention schemes for setting up of new distilleries (molasses & grain based as well as using dual feed stock)/ expansion of existing distilleries/ installation of Zero Liquid Discharge (ZLD) System/installation of MSDH column etc. Under the scheme, the interest subvention is given @ 6% p.a. or 50% of the interest charged by banks, whichever is lower, shall be borne by the Government for five years including one-year moratorium.

However, the production of ethanol through sugar based feedstocks will not be sufficient to meet the blending targets set under EBP Programme, therefore, Government allowed the production of ethanol from the grain based feed stocks also such as damaged food grains (DFGs), maize, surplus FCI rice, etc.


Under National Biofuel Policy 2018, Government fixed the targets of ethanol blending of 10% and 20% by 2022 and 2030 (later preponed to 2025) for the country for which efforts were required to increase the ethanol production capacity in the country for which Government announced various Ethanol Interest Subvention Schemes in 2018, 2019, 2020 & 2021. The Government has also opened a window w.e.f. 22.4.2022 (initially for 6 months, later extended for one year) for inviting fresh applications from those project proponents who have acquired land for ethanol project and obtained Environmental Clearance (EC) under "Scheme for extending financial assistance to project proponents for enhancement of their existing ethanol distillation capacity or to set up new distillery for producing 1st Generation (1G) ethanol”.

To achieve this target, Government is encouraging sugar mills & distilleries to divert surplus sugar and its allied products for production of ethanol. The following schemes have been launched under this:-


Ethanol Blending in Petrol Programme (EBP Programme)

In order to find a permanent solution to address the problem of excess sugar, Government is encouraging sugar mills to divert excess sugarcane to ethanol. Government has fixed target of 10% blending of fuel grade ethanol with petrol by 2022  & 20% blending by 2025. The target of 10% has been achieved successfully during Ethanol supply year (ESY) 2021-22.


        Till year 2013, ethanol distillation capacity of molasses based distilleries was only 215 cr litres. However, in past 10 years due to the policy changes made by the Government, the capacity of molasses based distilleries have been increased by more than three times and are currently at 723 cr litres. Capacity of grain based distilleries are presently about 347 cr litres. Thus, the overall capacity of ethanol production has reached to 1070 cr ltrs. 


Till year 2013, supply of ethanol to OMCs was only 38 crore litres with blending levels of only 1.53 % in ethanol supply year (ESY) 2013-14. Production of fuel grade ethanol and its supply to OMCs has increased by more than 11 times from 2013-14 to 2021-22 and historically high figure of 408 crore liters of ethanol was supplied in ESY 2021-22. In ESY 2021-22, a historically high figure of about 433.6 crore litres of ethanol was blended thereby achieving 10.02% blending which was higher than the set target of 10% for ESY2021-22.



With a view to support sugar sector and in the interest of sugarcane farmers, the Government has also allowed production of ethanol from B-Heavy Molasses, sugarcane juice, sugar syrup and sugar. Government is also encouraging distilleries to produce ethanol from food grains such as Damaged Food Grains(DFG), maize & rice available with FCI.


Government has been fixing remunerative ex-mill price of ethanol derived from C-heavy & B-heavy molasses, ethanol derived from sugarcane juice/ sugar/ sugar syrup, ethanol produced from food grains such as Damaged Food Grains (DFG), maize & FCI rice. The prices of ethanol from various feed-stocks current ESY 2022-23(Dec-Oct) are as under:


                                                (in Rs. per ltr.) 

Feed stock

ESY 2022-23(Dec-Oct)

Sugarcane juice


B- Hy molasses


C-Hy molasses


Damaged Food Grains (DFG)


Rice from FCI






 Additionally, GST as per actuals & Transportation will also be payable.


Note: The price of ethanol from sugarcane juice, B-Hy & C-Hy molasses is fixed by the Government whereas prices of ethanol from damaged food-grains/FCI rice/maize are fixed by the OMCs. 


          In sugar season 2018-19, 2019-20, and 2022-21 about 3.37, 9.26 and 22 LMT of sugar was diverted to ethanol. In previous sugar season 2021-22, about 36 LMT of excess sugar was diverted to ethanol.  In current sugar season 2022-23, it is likely that about 45-50 LMT of excess sugar would be diverted to ethanol.  By 2025, it is targeted to divert about 60 LMT of excess sugar to ethanol, which would solve the problem of high inventories of sugar, improve liquidity of mills thereby help in timely payment of cane dues of farmers.

Details of ethanol supplied to OMCs

Ethanol Supply Year (Dec-Nov)

Quantity Supplied

(in crore ltrs)

Blending % achieved





























It may be noted that a total number of 243 projects have been sanctioned so far across the country, out of which loan of Rs. 29769 Crore has been already been sanctioned. Out of the total sanctioned projects, amount of Rs. 11093 crore has already been disbursed for a total number of 210 projects.


 Number of Ethanol Projects approved under various Interest Subvention Schemes


Total No. of Projects approved

Andhra Pradesh






Daman & Diu










Himachal Pradesh


Jammu & Kashmir






Madhya Pradesh










Tamil Nadu




Uttar Pradesh




West Bengal


Andaman & Nicobar


Arunachal Pradesh






Dadar & Nagar Haveli
























1. In order to improve and systemize data management system in sugar sector, the Directorate of Sugar and Vegetable Oils under the Department has developed a web based platform (esugar.nic.in) for online submission of inputs by sugar mills on monthly basis. This has helped the Government to take prompt and informed policy decisions for better management of the sugar sector. The new system also provides transparency in the data management of the sugar mills as well as Government’s working. The portal also provides window for online connectivity with the State Governments for getting inputs regarding production, cane price arrears of sugars mills on fortnightly basis etc.

2.  The Directorate of Sugar & Vegetable Oils has also recently developed a Web Portal/Dashboard (sugarethanol.nic.in) for online submission of data on production of ethanol & its supply under Ethanol Blended with Petrol (EBP) Programme by all the distilleries either attached with sugar mills or standalone on periodical basis. The distilleries, which have been given benefit under Interest Subvention Scheme of DFPD, are also required to update their implementation status and constraints, if any, for their speedy redressal. This programme will help in monitoring the progress of under-implementation distillery projects also.

3.   Similarly, online registration facility for Edible Oil Processing Units is operational since May, 2014 (evegoils.nic.in).  Registered units are providing production data on processing of vegetable oils online which in turn helps in policy formulation.

4.  As a measure to have complete and integrated digitisation of the whole system as well as to have all the relevant data of sugar and ethanol industry at one place, a dedicated portal has been developed on National Single Window System (NSWS) i.e. https://nsws.gov.in. Currently, the P-2 portal has been completely migrated to the newly developed P-2 form on NSWS portal and the sugar mills are filling their monthly details on NSWS portal.