Aditya Jhunjhunwala, President of Indian Sugar Mills’ Association has asked government to come out with a clear roadmap on ethanol sourcing from the sugar industry as it would help to achieve the 20 per cent ethanol blending target.
As per news report published in The Hindu, he said, “Sugar industry need to double capacity to produce 750 crore litres.” Jhunjhunwala emphasized to achieve this, the industry requires setting up more ethanol-producing plants, which involves capital expenditure and time. He stressed the importance of having clear road map in place and prices should be based on a long-term formula taking into consideration the FRP, inflation, sugar prices etc.
ISMA estimates massive capacity enhancement that will require an investment of Rs.17,500 crores with a reasonable return on investment.
“Oil companies have increased the price for ethanol from damaged grains and maize. The sugar industry expects the need to invest almost ₹17,500 crores and reasonable ROI to create additional ethanol capacity. For this, it needs to know the pricing roadmap,” he further added.
Recently, ISMA in a letter to the Department of Food and Public Distribution, had appealed to the government to increase the ethanol price to Rs. 69.85 per litre.
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.”
Oil Marketing Companies (OMCs) have recently announced an additional incentive for ethanol produced from damaged food grain and maize. The price hike amounts to an increase of ₹3.71 per litre with immediate effect. The purpose of this increase is to provide support to distilleries so that they can maintain their production levels. Now, the total incentive amount for damaged food grain and maize will be ₹8.46 per litre and ₹9.72 per litre, respectively. This includes the total incentive amount for damaged food grain and maize, which also covers the interim incentive given on August 7. This move comes after the Food Corporation of India temporarily stopped supplying subsidised rice.
