The Central government has asked all sugar mills and distilleries to not use sugarcane juice or sugar syrup for ethanol production in ethanol supply year (ESY) 2023-24 with immediate effect, the Consumer Affairs Ministry said in an order today. The supply of ethanol from existing offers received by OMCs from B-Heavy molasses will continue, the order read. However, the move sparks doubts if there will be enough stock of ethanol to blend with fuel under a government initiative that aims to chop crude imports. News reports citing government sources earlier in the day suggested that the government was planning to discourage the diversion of sugar for ethanol production as part of the effort to ensure sufficient supplies of the sweetener in the local market. After India adopted the Biofuel Policy in 2018, the industry has invested heavily in setting up ethanol manufacturing capacities. The Indian authorities are expecting the output of sugar to fall owing to below-normal rainfall in key growing states. The Indian Sugar Mills Association, a producers' body, last month said sugar production is likely to fall 8 per cent to 33.7 million metric tons in the 2023/24 marketing year. Lowering this diversion towards ethanol may help boost the output of the sweetener.