A RECORD production of sugarcane over the last two years pushed up output of sugar and its by-product, molasses. Part of the increased supply of molasses was consumed domestically and the rest was exported.

In marketing years 2012 and 2013, cane output exceeded 58 million tonnes and 62 million tonnes respectively, up by five per cent in 2012 and seven per cent in 2013. Accordingly, sugar output was recorded at 4.7 million tonnes in 2012 and is estimated to surpass five million tonnes during this year.

In MY12, molasses production rose to 2.224 million tonnes from 2.034 million tonnes in MY11. And in the current year, the industry is likely to produce close to 2.5 million tonnes.

Increased production of molasses have created larger exportable surplus. Exports of molasses quadrupled in FY13 to 224,000 tonnes from 55,000 tonnes a year earlier and foreign exchange earnings also rose four times to $27.8 million from just $6.4 million. Sugar millers say, with higher molasses production in MY13 exports in FY14 may touch 300,000 tonnes mark.

“The larger surplus has prompted many exporters both from among sugar millers and commodity dealers to explore new export markets. And now their efforts are bearing fruit,” an official of Pakistan Sugar Mills Association told Dawn. He informed that buyers include China, Saudi Arabia, Turkey, USA, UK, France and Netherland.

“The reason why exports of molasses remains centered mostly in European countries or in Saudi Arabia and Turkey is that these nations use our molasses to produce food-grade alcohol,” says a Karachi-based exporter and quickly points out that export of raw molasses earn very low per unit prices. Currently raw molasses is being exported at an average f.o.b. price of $130-$150 per ton.

Industry sources say that many large sugar mills have their own distilleries where they convert molasses into bio ethanol which is primarily used in alcohol production. They say that molasses-converted industrial alcohol can again be converted into fuel alcohol, using molecular sieve technology and can be effectively utilised for cleaner power production. This, however, requires investment and capital expenditures that most sugar millers are reluctant to make.

But over the last two years, a few sugar mills have begun producing a limited amount of electricity to meet energy needs of their manufacturing plants. In fact, in the beginning of this year three sugar mills of Multan even began supplying 15MW to Multan Electric Power Company.

The use of molasses-converted alcohol is rising in paints and varnishes, cosmetics and pharmaceuticals industries due to expansion in output of these industries. Oil refineries also continue to use a limited amount of molasses-converted spirits for making ethanol or for blending purposes. The optimal use of molasses-converted alcohol can be ensured by developing food grade alcohol on a larger scale.

This would save foreign exchange as well because at present Pakistan has to import food-grade alcohol. Food-grade molasses-converted alcohol can give a boost to food exports too, where it can be mixed with the material used for polishing and preserving fruits and vegetables.

Exporters say they have lately started exploring the possibility of exporting molasses-converted industrial alcohol to a few countries in Africa but tough competition with US and Brazil continues to discourage.

These countries have got economy of scale in production of molasses-converted industrial alcohol and are able to supply it at attractive rates. Sugar millers say that as production of sugar obtained from sugar beet is increasing, prospects for producing food-grade molasses-converted alcohol have become brighter.

The properties of molasses, produced during the processing of sugar beet are slightly different than that of cane sugar molasses. Whereas normally both types of molasses are converted into industrial alcohol, the alcohol obtained from sugar beet molasses is more suitable for manufacturing of chemical substances used for polishing of fruits and vegetables.

According to a PSMA report, millers had produced less than 1000 tonnes of sugar from sugar beet in MY09 but in the next year the volume jumped to 4,600 tonnes and then to 13,500 tonnes in MY11 and to 18,500 tonnes in MY12. One of the reasons for this rise is expansion in beet production in KPK and in Punjab and renewed focus of KPK on manufacturing of sugar from sugar beet. Molasses obtained during the processing of sugar beet is also used widely in preparation of herbal treatment formulas and, in when converted into alcohol and further refined, in food colouring materials and cosmetics.

In addition to rising demand for molasses in local ethanol and charcoal manufacturing industries, an uptick has been witnessed in recent years in demand of large bakeries and makers of confectionary items. Dried yeast is also being produced from molasses on a much wider scale now — thanks to expanding market of food items. A senior official of a Karachi-based company engaged in sugar and edible oil business told Dawn his company alone makes more than a thousand kilogrammes of molasses-based dried yeast and supplies both dried molasses and molasses-based dried yeast across Pakistan besides exporting to a few European and Gulf countries. —Mohiuddin Aazim