Increasing ethanol price made from damaged grains under consideration

The government may consider increasing the price of ethanol made from damaged foodgrains by 2-3 rupees per ltr.

Currently, the price at which oil marketing companies buy ethanol made from damaged foodgrains has been fixed at 52.92 rupees per ltr.

The move is necessary as input and transportation cost of damaged foodgrains has increased due to inflationary pressures.

Prices of damaged feedstock have risen nearly 30% and if ethanol prices derived from these, such as broken rice and maize, is not increased, the Ethanol Blending Programme may get affected.

Domestic prices of damaged foodgrains have also risen due to a sharp rise in exports. The war between Russia and Ukraine has given India an opportunity to sell its foodgrain in the global markets.

 While fixing the price of ethanol derived from damaged foodgrain, the government had taken 16,000 rupees per tn as the budgeted price. This has now risen to over 20,000 rupees, leaving distilleries in a difficult situation.

To boost ethanol production as well as blending, the Centre had raised the price of ethanol made from B-heavy molasses for 2021-22 to 59.08 rupees a ltr from 57.61 rupees, and that from C-heavy molasses to 46.66 rupees a ltr from 45.69 rupees in the previous season. It also increased the price of ethanol made from 100% cane juice, sugar and sugar syrup to 63.45 rupees a ltr from 62.65 rupees in 2020-21.

The government is also encouraging distilleries to produce ethanol from other feed stocks such as sugar beet, sweet sorghum, and more.