India is the largest producer of sugar in the world. In terms of sugarcane production, India and Brazil are almost equally placed. In Brazil, out of the total cane available for crushing, 45% goes for sugar production and 55% for the production of ethanol directly from sugarcane juice. This gives the sugar industry in Brazil an additional flexibility to adjust its sugar production keeping in view the sugar price in the international market as nearly 40% of the sugar output is exported. The annual projected growth rate in the area under sugarcane at 1.5% per annum has doubled during the last five years. This is because it is considered to be an assured cash crop with good returns to the farmers vis-a-vis other competing crops. India is currently passing through a glut situation with closing stocks at the end of the year of over 100 lakh tons since 1999-2000. Correspondingly, molasses production has also increased. The table below gives the production of molasses, alcohol utilization by the alcohol-based chemical industry, potable sector and the surplus at the end of each year. It is therefore evident that along with sugarcane production, phenomenal growth is also taking place in the production of molasses, the basic raw material for the production of ethanol from sugarcane. Of course, there are also other agro routes available to produce ethanol. According to MPNG, 5% ethanol blends on an all-India basis would require 500 million liters. The current availability of molasses and alcohol would be adequate to meet this requirement after fully meeting the requirement of the chemical industry and potable sectors.