Don't cut import duty on distillers dried grains, ethanol makers urge govt
This story was originally published at 16:01 IST on 2 January 2025
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NEW DELHI – The Grain Ethanol Manufacturers Association has urged the government not to cut the import duty on distillers dried grains and corn gluten meal. Distillers grain and corn meal are by-products of ethanol production and are used as animal feedstock.
"It has come to our attention that your ministry is considering a proposal to reduce the import duties on distillers dried grains and corn gluten meal from 15% to 5% or nil," the association wrote in a letter to Commerce Minister Piyush Goyal on Wednesday. As per the association, the economic viability of ethanol production heavily depends on the revenue from distillers dried grains. The availability of low-cost distillers grain from foreign markets could severely undermine the grain ethanol industry, it added.
In 2023-24 (Nov-Oct), grain-based distilleries made 3.34 billion litres of ethanol, which led to oversupply of distillers grains in the domestic market. Amid surplus production, India's exports of distillers grain increased fivefold on year to 350,000 tonnes, the letter said. Ethanol production in 2024-25 is projected at 5.74 billion litres, which would further increase supply of distillers grain by 57% from last year, it added.
According to the association, the government need not encourage import of distillers grains amid oversupply from domestic ethanol plants. The oversupply of high-protein distillers grain already provides a natural substitute for expensive and lower-protein alternatives such as maize, the letter said.
The government has been pushing ethanol production from maize for its ethanol blending programme. However, maize is a sought-after feedstock by the poultry industry, and the feed industry now has to compete with the ethanol industry for the grain.
In 2024-25, more ethanol is set to come from grain-based distillers than sugar-based units. Of the 8.37 billion litres of ethanol allocated to be supplied to oil marketing companies in 2024-25, 62.7% will be sourced from grains and 37.3% from sugarcane, according to tender results.
The government is promoting ethanol production to achieve its ambitious ethanol blending targets. To reduce dependence on crude oil, the government has set a target of achieving 20% blending by 2025-26. End
Reported by Afra Abubacker
Edited by Avishek Dutta
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