To encourage mills to divert sugarcane towards ethanol production, the Centre on Thursday increased the procurement price of all the three categories of ethanol produced from cane products by ₹ 1.953.34 per litre for the 2020-21 season, which is starting on December 1.

Ethanol, at present. is allowed to be produced from C-heavy molasses, B-heavy molasses, and sugarcane juice or syrup or sugar. It is also allowed to be made from broken unused grains.

The price hike is for ethanol derived only from sugarcane. The decision to increase the procurement price was taken at a meeting of the Cabinet Committee on Economic Affairs (CCEA).

For ethanol produced from C-heavy molasses, the price for the 2020-21 season will be ₹ 46.69 per litre, up from ₹ 43.75 in the current season -- a jump of around 4.43 per cent; the procurement price for ethanol from B-heavy molasses (intermediary molasses) for oil marketing companies (OMCs) for the upcoming season will be ₹ 57.61 per litre, an increase of 6.15 per cent.

The procurement price of ethanol produced from sugarcane syrup, juice or sugar will be ₹ 62.65 per litre, an increase of 5.33 per cent from the current year.

As has been the norm, an OMC that buys ethanol at a prefixed price will pay GST and transportation charges, as well.

According to an official statement, OMCs have also agreed to further reduce the security deposit amount from 5 per cent to 1 per cent, extending abenefit of around ₹ 400 crore to ethanol suppliers. UPWARD MARCH

Ethanol procurementprice for the 2020-21 season that starts from Dec (in₹ litre)

Price for2019-20 season

Price for2020-21 From B-heavy molasses

NOTE: Ethanol Procurement Season Runs from December to November Source: Press Information Bureau (PIB)

%Increase

4.43 6.15 5.33

From C-Heavy molasses From sugarcane juice/ syrup/ sugar 43.75 45.69 57.61 62.65 54.27 59.48