Brazil, one of the major industrial alcohol producers in the world, is reported to have a surplus of around 120 crore litre of alcohol and can supply cheaper than Indian stock.

The state government was forced to lift the one-year old ban on alcohol exports on July 17 following the Mumbai high court's interim order passed in a writ petition filed by a city's leading alcohol exporter Ruia & Ruia.

The petitioner had challenged the government's decision on the grounds that the state government has no jurisdiction to pass any legislation on the subject of industrial alcohol. Prima facie, banningexport of industrial alcohol outside India by the state government is without jurisdiction.

The Distillers' Association of Maharashtra, a representative body of in all 53 distilleries from the state has stressed the need to increase the permitted quantity to 3.50 crore litres of alcohol for exports against just 1 crore litre, which they say is "a drop in the ocean."

Further, a section of association members say, exporters will have to look for alcohol markets other than Brazil, like Japan and Korea. However, currently, both of these countries are reeling under extreme financial crisis, and may not offer immediate solution to the excess of alcohol produced in the state. Meanwhile, there seems to be a rift between the association and its members. While the association office bearers wants that the alcohol exports should be routed through the apex body on "no-profit-no-loss" basis, the member exporters don't want such a move as they fear a fall in profits.

"Had the government swung into action about fourmonths ago, it would have helped the exporters and distilleries in improving alcohol exports. But now, there will be few takers in the overseas as Barzil has a surplus of 120 crore litre of industrial alcohol and prices prevailing in the international markets are low," an exporter from Maharashtra said. Ironically, the exports of rectified spirit and special denatured spirit will not fetch more than Rs 8 per litre and Rs 9.50 per litre respectively. For distilleries which have to complete in the export markets before the next crushing season beginning November 1998, it will not be a cost effective proposition as in the international market the price will not go beyond Rs 10.50 per litre.

Moreover, the distilleries will have also to bear expenses of at least Rs 2.50 per litre on taking alcohol from distillery to port.

Maharashtra State Cooperative Sugar Factories Federation, a representative body of 117 cooperative sugar factories said that the government should have lifted the ban quite early especiallywhen the molasis and alcohol prices were ranging between Rs 1,800 and Rs 2,000 per tonne and Rs 14 and 16 per litre respectively during November 1997 to March 1998. The Federation has also expressed serious doubts over the exports of even one crore litre alcohol fully in view of global scenario.

The Federation wants that the inter state export duty of Rs 10 per litre imposed by the state government should be brought down to Rs 3 as prevailing in Gujarat and Madhya Pradesh. However, exporters are strongly opposing this move on the grounds that such a move will left with no alcohol available for overseas exports though an inter state exports will be possible.

Interestingly, distilleries and exporters have joined hands together in demanding removal of quota system for alcohol and molassis exports and a consistent policy in this regard. In fact the government if at all is serious to increase excise revenue should fix the quantity of molassis and alcohol exports by October-November for the 1998-99 season.

It should be remembered here that the alcohol stock will mount to 11 crore litre at the beginning of next crushing season and it will be difficult to distilleries and exporters to dispose it off without an advanced allocation.

Distilleries and exporters have expressed disappointment over the government's decision to give five per cent guarantee equivalent to the quantity of alcohol allowed to be exported by the exporter.