The price hike of ethanol will most likely be applicable for ethanol marketing year 2023-24 (Nov-Oct), according to the source.

 

 

 

Sugar mills manufacture ethanol, which is mostly bought by oil marketing companies and used for blending in petrol to make cleaner fuel. Currently, the price of ethanol derived from 100% sugarcane juice is 65.61 rupees a ltr, from B-heavy molasses is 60.73 rupees per ltr, and from C-heavy molasses is 49.41 rupees a ltr. 

 

 

 

Last week, the Indian Sugar Mills Association had urged the government to increase the price of ethanol to 69.85 rupees per ltr to achieve the 20% ethanol-blended petrol target by 2025.

 

 

 

The government has been implementing a programme for ethanol blending with petrol throughout the country under which oil marketing companies sell petrol that is blended with ethanol. Under the National Policy on Biofuels, the government has set a target to achieve 20% ethanol blending in petrol by 2025 from 2030 earlier.

 

 

 

At present, 11.7% ethanol is blended with petrol, according to Food Secretary Sanjeev Chopra. The government had earlier this year rolled out the target of 20% ethanol-blended petrol in several states and union territories as part of the programme.

 

 

 

Ethanol procurement price is linked to the fair and remunerative price of sugarcane. This price has been raised to 315 rupees per 100 kg for 2023-24 sugar season (Oct-Sep) from 305 rupees in 2022-23. The fair and remunerative price paid to farmers has been raised twice in recent years. 

 

 

 

For the sugar season starting October, Indian Sugar Mills Association has estimated that 4.5 mln tn sugar will be diverted towards the production of ethanol, as compared to 4.1 mln tn in 2022-23. Approximately 12 bln ltr ethanol is required to achieve the 20% ethanol-blended petrol target by 2025, according to the association. The sugar industry has in 2022-23 signed contracts to supply 4 bln ltr ethanol, it said.

 

 

 

On sugar exports, the official quoted above said that the government may take a call only when the production scenario for the next season becomes clear. Market participants believe that exports of sugar may remain restricted as there are concerns about lower production of the sweetener next season. 

 

 

 

For the 2022-23 season, shipments of sugar were capped at 6.1 mln tn, down from 11 mln tn in the previous year.