Sri Lanka minister wants price controls on maize ethanol to protect state enterprise
Sri Lanka’s Industries Minister Sunil Handuneththi proposes a floor price on maize ethanol to boost prices and help state-run Lanka Sugar clear unsold stocks. While cane ethanol costs **800-1,000 LKR/litre, maize ethanol is made for just 173 LKR/litre, creating market imbalances. However, import controls on maize cause feed shortages, affecting egg quality and increasing protein costs for poor families.
ECONOMYNEXT – Sri Lanka’s Industries Minister Sunil Handuneththi has called for a floor price on ethanol made from maize to push up prices and help a state enterprise get rid of stocks of unsold ethanol.
The cost of making cane ethanol at state-run Lanka Sugar, which was expropriated from private citizens during a Rajapaksa regime, is around 800 to 1000 rupees a litre, Minister Handunetthi said.
But parties are making ethanol from maize for around 173 rupees a litre, he told reporters after going on a inspection visit to Lanka Sugar.
“When they buy third grade maize they can make ethanol for 173 rupees a litre,” he said. “Today there is no maize for chicken feed. So, the egg yolk is no longer yellow.
“From can only ethanol can be made. So we have suggested to the relevant sections of the government to set a minimum price (floor price) for those who use maize to make ethanol.”
Minister Handuneththi said he had also discussed with the management and staff of Lanka Sugar about making alcohol for sale to the public.
After Lanka Sugar was built with two expropriated privatized companies, the Rajapaksa regime banned the import of ethanol, triggering tax losses, smuggling and other innovations like maize ethanol.
Maize is also under import controls and licensing leading to higher than world prices and frequent shortages due to delays in issuing licenses.
Critics have pointed out that the import controls on maize is contributing to excessively high protein prices for children of poor families in particular.
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Source : Economy Next
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