OMCs’ ethanol tender raises concerns over maize-rice feedstock balance, says GEMA
GEMA has urged the government and oil marketing companies to review ethanol procurement prices and allocation norms for ESY 2026-27, citing concerns over competitiveness between maize- and rice-based producers. The association seeks transparent allocations and feedstock-based pricing to ensure balanced industry growth.
The latest OMC tender has triggered concerns among grain-based ethanol manufacturers over feedstock pricing, allocation limits and the distribution of procurement volumes, The Hindu reported.
The Grain Ethanol Manufacturers Association (GEMA) has urged the government and oil marketing companies (OMCs) to review ethanol procurement prices and allocation norms for the Ethanol Supply Year (ESY) 2026-27, warning that the current framework could create an imbalance between maize- and rice-based ethanol producers.
Under the tender, OMCs have fixed the procurement price at Rs 60.32 per litre for ethanol produced from surplus foodgrains (SFG), subject to a cap of 108 crore litres for the first three quarters. The price has been set at Rs 64 per litre for damaged foodgrains (DFG) and Rs 66 per litre for maize-based ethanol, along with an additional Rs 2.79 per litre.
The procurement framework excludes ethanol produced from sugarcane juice, sugar syrup and B-heavy molasses, while allowing supplies derived from C-heavy molasses.
GEMA has expressed concern that the pricing structure could favour rice-based feedstocks over maize, potentially affecting the latter’s competitiveness as an industrial raw material. The differential rates have also created uncertainty over the distribution of procurement demand among different feedstock categories.
Industry estimates suggest that DFG-based ethanol procurement allocation stood at around 60 crore litres during ESY 2025-26. For ESY 2026-27, manufacturers expect the allocation to exceed 700 crore litres.
GEMA president C.K. Jain said procurement policies should ensure a level playing field for maize- and rice-based ethanol manufacturers. He emphasised that prices should reflect differences in feedstock costs and allocation mechanisms should provide producers with greater clarity and predictability.
He called for a review of the existing pricing and allocation framework to ensure balanced growth across different feedstock categories.
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Source : ChiniMandi
