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Govt to revisit policy on ethanol from cane on priority, says official
This story was originally published at 20:26 IST on 27 July 2024
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--Govt official: Revisiting ethanol policy is first priority of govt
--CONTEXT: Comments by senior govt official on sidelines of sugar event
--Food secy: To decide on sugar minimum sale price hike in near future
By Afra Abubacker
MUMBAI - The government will prioritise revisiting its policy on the use of sugarcane by-products for ethanol and then decide on revising the minimum selling price of sugar, a senior government official told Informist on the sidelines of the All India Sugar Trade Association's Sugar and Bioenergy Conclave today.
"We are sure that some decision (on ethanol) will come in August," the official said. The official clarified that the Department of Food and Public Distribution will first remove restrictions imposed on ethanol production from sugarcane feedstock, while ethanol price revisions will be taken up by the Ministry of Petroleum and Natural Gas.
The official further said the government is currently working on the policy concerning sugar diversion for ethanol production for the upcoming ethanol supply year (Nov-Oct).
In December, the government capped the amount of sugar that could be diverted for ethanol production at 1.7 mln tn amid concern over low production of the sweetener. However, sugar production in the country picked up and as of Apr 15 it was 31.1 mln tn, down merely 0.5% on year. As a result, the government allowed additional sugar diversion for ethanol production, taking it to a little over 2.0 mln tn, from 1.7 mln tn earlier.
The industry has been urging the government to withdraw restrictions on the use of sugarcane-based feedstock for ethanol production. It has also been demanding a hike in ethanol prices made from sugarcane by-products such as sugarcane juice, B-heavy molasses, and C-heavy molasses.
Oil companies buy ethanol to blend with petrol to promote green mobility and achieve 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. To achieve the 15% blending aim, India needs about 8.25 bln ltr of ethanol.
However, experts believe India is likely to miss the 15% blending target this year. Oil marketing companies have procured 4.01 bln ltr of ethanol and achieved a cumulative blending of 13.0% in the first seven months of the ethanol supply year (Nov-Oct), as of Jul 1, according to a monthly report by the Petroleum Planning & Analysis Cell.
About the decision on hiking the minimum selling price of sugar, the government official said that talks are going on, but a consensus is yet be reached.
Today, Food Secretary Sanjeev Chopra, who spoke on the sidelines of the event, said that the government will hopefully take a call on the minimum sugar sale price.
On Jun 12, Informist had exclusively reported, quoting another senior government official, that the Centre was mulling over raising the minimum selling price of sugar for the upcoming production season, starting October. "The government will only give a reasonable hike, which will be below the industry demand," the official had said. The industry has been demanding that the minimum selling price of sugar be raised to 40-41 rupees per kg.
In February, the Cabinet Committee on Economic Affairs approved a record 7.4% hike, or a 25-rupee increase, in the fair and remunerative price of sugarcane to 340 rupees per 100 kg for the sugar season 2024-25 (Oct-Sep). This was the fourth time that fair and remunerative prices have been hiked since 2021-22, while on the other hand, the minimum selling price for sugar has not been revised since 2019. End
Edited by Aditya Sakorkar
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