Hike in procurement price of ethanol not sufficient, says sugar industry expert
Kolhapur: The decision of oil marketing companies (OMCs) to procure ethanol at Rs 56.28 per litre will not be profitable for the sugar mills, feel sugar industry experts.
The OMCs will be paying Rs 6.87 extra for every litre of ethanol produced from C-heavy molasses that have less sugar content. The quota of sugar cane juice or syrup to be diverted for ethanol production has been reduced by 50% by the central government.
The aim is moved at ensuring adequate quantity of sugar remains available in the market so that the price remains stable.
The OMCs buy the ethanol and blend it with petrol that helps them save on foreign currency required to be spent on buying oil from overseas market.
“The OMCs have increased the prices for procuring ethanol. Even though the procurement price has increased to Rs 56.28 per litre, the millers are getting between Rs 68 and 70 per litre from selling the extra neutral spirit used for making alcohol. Therefore the move may not be profitable for the mills from Maharashtra and Karnataka,” Vijay Autade, a sugar industry expert, said.
There are around 140 distilleries attached to the mills in Maharashtra. The total installed capacity of the distilleries in the state is around 244 crore litres.
Meanwhile, the Indian Sugar and Bio-energy Manufacturers’ Association (ISMA) has hailed the decision by the OMCs stating that it will help the mills pay the farmers on time. “There should be ban on the export of molasses with immediate effect,” the association added.
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