Govt may hike 2024-25 ethanol rates for all cane feedstock - official
Informist, Tuesday, Aug 13, 2024
--Source: Govt may hike 2024-25 ethanol rates for all cane feedstocks
By Afra Abubacker
NEW DELHI – The government is likely to hike price of ethanol derived from all sugarcane-based feedstock, including B-heavy molasses and cane juice, for 2024-25 ethanol supply year starting November, a senior official told Informist.
"Ethanol price revision of sugarcane (feedstock) is routine. But, last year, it was not revised for B-heavy and cane juice," the official said.
For 2023-24 ethanol year, the government only increased prices of ethanol from C-heavy molasses by 6.87 rupees per ltr to 56.28 rupees a ltr. Currently, ethanol made from sugarcane juice is priced at 65.61 rupees a ltr, B-heavy molasses at 60.73 rupees a ltr, unchanged from 2022-23.
The government is likely to announce the quantum of sugar diversion for ethanol production in 2024-25 by August end, the official said. It will also clarify if B-heavy molasses and cane juice can be used to make ethanol in the upcoming season, he added. In 2023-24, India diverted 2.5 mln tn sugar for ethanol output.
In December, the government restricted the use of B-heavy molasses and cane juice for ethanol output to ensure sufficient sugar availability in the country. Sugarcane juice has the most sugar content, followed by B-heavy and C-heavy molasses.
A committee headed by the joint secretary of the Ministry of Petroleum and Natural Gas has recommended hikes in ethanol rates for sugarcane-based feedstocks, he said. The increase in ethanol rates will be based on the fair and remunerative price of sugarcane, he added.
The price revision is being considered as the government wants to incentivise ethanol production to meet its blending targets. To reduce dependence on crude oil, the government has set a target of achieving 15% blending of ethanol with petrol in 2023-24, 18% in the subsequent year, and 20% in 2025-26. India has so far achieved 13% blending as of Jul 1 in the ongoing ethanol supply year ending October.
In February, the Cabinet Committee on Economic Affairs approved a hike of 25 rupees per 100 kg in the fair and remunerative price for sugarcane for the 2024-25 (Oct-Sep) sugar season to 340 rupees per 100 kg. Last year, it was raised by 10 rupees to 315 rupees per 100 kg.
The industry has been demanding ethanol price hikes and an increase in minimum selling price of sugar citing the hike in fair prices of sugarcane. Fair and remunerative prices are paid by sugar mills to sugarcane farmers on cane purchases.
The minimum selling price of sugar is 31 rupees per kg, unchanged since 2019. Previously, the fair prices were increased to 290 rupees per 100 kg in 2021-22 from 255 rupees, and then to 305 rupees in 2022-23. End
