Government allows sale of FCI rice for ethanol production; revokes curb on sugarcane juice & syrup
India has lifted a 13-month ban on rice sales to ethanol distilleries, permitting up to 23 lakh tonnes through e-auctions until October 2024. This move aims to boost ethanol production and manage surplus stocks held by the Food Corporation of India (FCI). Additionally, restrictions on using sugarcane juice and syrup for ethanol production have been removed, facilitating increased ethanol output for the 2024-25 ethanol supply year
NEW DELHI: Government on Thursday lifted a 13-month ban on sale of rice to grain-based ethanol distilleries by allowing such entities to purchase up to 23 lakh tonnes of the foodgrain through e-auction till October, a move that will boost ethanol production and offload excess stock held by Food Corporation of India. The government had banned the sale of rice for ethanol production last year.In another decision just ahead of the Maharashtra assembly election, government also revoked the restriction on use of sugarcane juice and sugar syrup for ethanol production, which was imposed last December.
As per a notification issued by the food ministry, it permitted sugar mills to use cane juice or syrup to produce ethanol for the ethanol supply year (ESY) 2024-25, beginning November 1.According to the food ministry, grain-based ethanol producers can participate in e-auctions and purchase FCI rice between August and October 2024 under the Open Market Sale Scheme (OMSS).
The ministry said ethanol manufacturers can purchase rice through weekly e-auctions and the purchases are subject to ethanol allocation by oil manufacturing companies.FCI has been conducting e-auctions for rice sales to private traders since last July to manage the surplus inventory. The current stock of rice with FCI is more than 540 lakh tonnes, which is over three times more than the required buffer stock.
The agency had been staring at the problem of storing fresh crop just ahead of the upcoming harvest season.This move signals a shift in the government’s stance on using foodgrains for biofuel production as it balances food security concerns with the need to manage excess stocks.So far as the decision with regard to sugar mills are concerned, the ministry, in a notification, said, “Sugar mills and distilleries are allowed to produce ethanol from sugarcane juice/sugar syrup, B-Heavy molasses as well as C-Heavy molasses during ESY 2024-25 as per the agreement with OMCs.”
The food department in coordination with the petroleum ministry will periodically review the diversion of sugar to ethanol production vis-a-vis the production of sugar in the country, so that year-round sugar availability for domestic consumption is maintained, the notification said.The government has set a target of 20% ethanol blending in petrol by 2025. The sugar mills body, Indian Sugar and Bio-Energy Manufacturers Association, has welcomed the decision. Its director general Deepak Ballani said this is a significant relief for the industry.
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