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Informist, Wednesday, Jan. 29, 2025

 

--Cabinet OKs price of ethanol from C-Heavy molasses at INR 57.97/ltr 

--Cabinet OKs prices of ethanol from B-Heavy molasses at INR 60.73/ltr 

 

NEW DELHI – The Union Cabinet Wednesday approved a 3% hike in the price of ethanol made from C-heavy molasses for the ethanol supply year 2024-25 (Nov-Oct). The price of ethanol made from C-heavy molasses has been hiked to INR 57.97 per litre from INR 56.28 per litre.

 

Amongst the sugarcane-based feedstock basket, the Cabinet has only hiked rates of ethanol made from C-heavy molasses in the ongoing supply year ending October. Ethanol made from sugarcane juice is priced at INR 65.61 per litre and B-heavy molasses at INR 60.73 per litre, unchanged from 2022-23.

 

Sugar mills manufacture ethanol and their major buyers are oil marketing companies which use it for blending with petrol to make it a greener fuel.

 

Mills have been demanding a hike in ethanol prices for 2024-25. The procurement price of ethanol is linked to the fair and remunerative price of sugarcane, which the government increased by INR 25 to INR 340 per 100 kilograms. For sugarcane purchases, mills have to pay farmers prices decided by the government.

 

The revision in prices of ethanol made from C-heavy molasses will provide remunerative prices to ethanol suppliers and assure sufficient availability of ethanol to meet the increased blending target, an official release said. Oil companies purchase ethanol from distilleries to blend the biofuel with petrol.

 

The government has set a target of achieving 20% blending by 2025-26 to reduce dependence on crude oil and save foreign exchange. India achieved 14.6% blending in 2023-24.

 

Amid India's push for higher ethanol blends, the industry was expecting the government to hike the price of ethanol made from all sugarcane-based feedstock. However, amid concerns over lower sugar production in 2024-25 (Oct-Sep), the government has only incentivised ethanol production from C-heavy molasses, which has the least sugar content against cane juice and B-heavy molasses. 

 

The government may have been alarmed by warnings of lower closing stocks of sugar in 2024-25 (Oct-Sep), Praful Vithalani, chairman of All India Sugar Trade Association, said. Major sugar trade bodies have cut their estimates for sugar production in 2024-25 amid a decline in sugarcane yields. 

 

According to All India Sugar Trade Association, sugar production in 2024-25 (Oct-Sep) is estimated to fall 17% on year to 26.5 million tonnes, from 31.9 million tonnes last year. The association has projected the ongoing season to close with 4.5 million tonnes of sugar against 7.9 million tonnes last year.

 

"From C-heavy molasses industry can produce only ethanol only, industry cannot produce sugar as it has less sugar content," Vithalani said. According to trade bodies, mills are likely to divert 4 million tonnes of sucrose or sugar for making ethanol in 2024-25 (Nov-Oct). 

 

In the last decade, India has saved INR 1.13 trillion of foreign exchange and about 19.3 million tonnes of crude oil due to the ethanol blending programme. End

 

Reported by Afra Abubacker

Edited by Saji George Titus

 

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