ISMA, the premier association of private sugar mills of India, in a letter to the Department of Food and Public Distribution, appealed to the government to increase the ethanol price to Rs. 69.85 per litre. To achieve the 20% blending by 2025, about 1200 ltrs of ethanol is required; the sugar industry has currently contracted 400 cr ltrs in 2022-23 and for additional 800 cr ltrs, ISMA estimates massive capacity enhancement that will require an investment of Rs.17,500 crores with a reasonable return on investment. This appeal is made in light of the Hon’ble Prime Minister’s vision and the road map of Ethanol Blending Program (EBP) that sets a target to achieve 20% blending in petrol by 2025.
Without proper return, the industry and the banks will not be able to make these additional investments. It is also worth mentioning that the supply of juice has been less and below the government’s expectations in the current year due to viability of the current price. ISMA requests that the current system of TPA should be signed with all the suppliers, certain amendments in the tender terms issued by OMCs, continuation of interest subvention scheme and revision of Ethanol price keeping in mind the increase in FRP, other cost of production and the sugar prices will be the key requirement to achieve the goal.
According to the ISMA, “Based on our assessment, the price of ethanol produced from sugarcane juice/syrup should be Rs. 69.85 per ltr considering the FRP of Rs. 305 per quintal. With increase in FRP of sugarcane for 2023-24 SS, revised to Rs. 315 per ltr, a further enhancement of the price of ethanol is required.”
