Ethanol production to get a boost from rice allocation at lower prices
The government has reduced the price of surplus rice for ethanol production from ₹2,800 to ₹2,250 per quintal to support ethanol manufacturers and stabilize grain prices. This move aims to reduce reliance on maize and boost production. Ethanol distilleries can buy up to 2.4 million tonnes at the revised rate.
The government decision to significantly reduce prices of the rice allocated for ethanol manufacturers from the Food Corporation of India’s (FCI) surplus stocks would bring in stability in grain prices, which is key a raw material for grain-based ethanol manufacturers.
“Rice prices which had been elevated level for last one year would decline as the government has announced 20% cut in prices to Rs 2250/quintal from Rs 2800/quintal fixed earlier under open market sale of the Food Corporation of India surplus stock,” Abhinav Singal, committee head and treasurer, Grain Ethanol Manufacturers Association (GEMA), told FE .
Stability in feed prices would boost ethanol production from rice, while at Rs 28/kg earlier offered by FCI it was unviable for the units,” Singhal said while adding that maize prices have risen sharply because of demand from the poultry and livestock feed industry.
About 70 odd Grain based ethanol manufacturers contribute about 65% of the 1000 crores litres of biofuel produced in the country annually while the rest is produced from sugarcane.
Last week, food minister Pralhad Joshi had revised downward the reserve price of rice by 20% to Rs 2250/quintal to be sold to state governments and to supply grain based ethanol manufacturers from Rs 2800/quintal under open market sale scheme from the surplus grain stock of Food Corporation of India.
According to a food ministry order, state governments and their corporations can purchase up to 1.2 million tonne (MT) of rice, while ethanol distilleries are allowed to buy up to 2.4 MT at a reduced rate.
“These decisions reflect the Government of India’s commitment to supporting states in fulfilling their obligations under state schemes, promoting food security, and bolstering ethanol production as part of the national energy strategy,” Joshi said in a statement.
Officials acknowledge that there have been no takers for rice allocated for ethanol manufacturers because of higher prices of Rs 28/kg fixed by the government for open market sale.
In August last year, the government lifted a 13 months ban on rice sales to ethanol distilleries by sanctioning purchase of 2.3 million tonne (MT) from the central pool grain stocks for distilleries at Rs 28/kg excluding transportation cost.
At present, FCI and agencies hold 31.3 million tonne (MT) of rice stocks, excluding 35 MT receivable from millers. The rice stock is against the buffer of 7.61 MT for January 1.
“To reduce the demand pressure on only grain available – maize, the government should release rice unfit for human consumption to the ethanol industry at a price of Rs 20 to 21, which would help sustain the industry’s viability,” an official with grain-based ethanol manufacture had said.
Currently the oil-marketing companies pay Rs 64/litre for ethanol produced from the rice.
Grain-based ethanol manufacturers across Punjab, Haryana, Uttar Pradesh, Maharashtra, Madhya Pradesh, Bihar, West Bengal and Tamil Nadu currently using maize or rice as main feed stock.
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Source : The Financial Express
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