OMCs procure ethanol as a ready green fuel for blending directly with petrol which reduces import of crude oil proportionately and also encourages sugar mills to earn higher from by-products. This year sugarcane crop was damaged in the monsoon flood rendering thereby lower availability. The government has fixed ethanol procurement price of Rs 59 a litre with a variation of a couple of rupees depending upon the proximity of supply.
Data compiled by ISMA showed OMCs had floated tenders for requirement of 3.32 billion litres of ethanol last cane crushing season (October 2018 – September 2019). Of which, OMCs finalised ethanol supply for 2.39 billion litres and they contracted for 2.45 billion litres. Interestingly, OMCs lifted only 1.87 billion litres during last crushing season.
The ethanol requirement quantity for the current season, however, has increased as OMCs are looking to achieve 5 per cent of blending target.
“A number of sugar mills have set up their independent distilleries and existing ones have expanded capacity to increase its supply in future,” said Verma.
Vijay Banka, Managing Director, Dwarikesh Sugar Industries, said, “ we have commissioned new 100 KLPD (kilo or thousand litres per day) distillery plant at Bijnor facility in UP. The capital expenditure of approximately Rs 145 crore will enable benefits to accrue across the foreseeable future.”
Lower cane availability is also impacting sugar production. ISMA reported 26 per cent decline in India’s sugar production at 10.86 million tonnes for the period between October 1, 2019 and January 15, 2020 as compared to 14.74 milion tonnes produced for the same period last year.
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