Consider raising rates of ethanol from sugarcane: ISMA

Indian Sugar and Bio Energy Manufacturers Association (ISMA) has requested the Government to consider suitable increase in ethanol prices when produced from sugarcane juice and B-Heavy molasses (BHM) to support the sugar sector’s viability and ensure timely cane payments to farmers.

The Cabinet Committee on Economic Affairs (CCEA) on January 29 approved a 3 per cent rise in C Heavy Molasses (CHM) for the ethanol supply year 2024-25 (November-October). The new price will now be Rs 57.97 a litre against Rs 56.58 earlier. There has been no change made in prices of ethanol from other feedstock. Ethanol would continue to be purchased by oil marketing companies at ₹71.86 a litre when made from maize, at Rs 65.61 from sugarcane juice/syrup, at Rs 64 from damaged foodgrain (rice), and at Rs 60.73 a litre from BHM. For ethanol from FCI’s subsidised rice, the price remains at Rs 58.50/litre.

Since CHM contains little sugar as it is the end product of processing in the sugar industry, when ethanol is produced from it, maximum amount of sugar could be produced. In last sugar season (October-September), the government had allowed ethanol only from CHM.

Highlighting that the sugar sector has invested around Rs 40,000 crore for building up of huge capacities which has doubled in last five years — around 850 crore litre per annum now – ISMA said that the industry is capable to increase its capacity further and can cater to achieve the blending targets as set by the government.

Ethanol prices made from sugarcane juice and BHM were last revised in 2022-23 ethanol supply year (November-October). On the other hand, the fair and remunerative price (FRP) of sugarcane has increased twice by a total of ₹35 per quintal and now reached at Rs 340 per quintal for 2024-25 season, it said.

Suggesting a FRP-linked ethanol pricing formula, the industry body of private sugar mills has also said that such linkage should be followed by the government for determination of ethanol procurement prices.

The viability of the sugar industry, its investments and subsequent contribution to the roadmap being prepared for beyond E20 (blending above 20 per cent ethanol with petrol) shall be difficult to sustain without the whole-hearted support of the government, ISMA said.

Tags: CCEA, Ethanol, ISMA, Sugarcane
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