Sugar mills have sought 25 per cent increase in Ethanol prices for the next season for a smooth production of Sugar directly from cane juice.
Currently, oil-marketing companies (OMCs) are paying around Rs 41 a litre for molasses-based Ethanol production, considered to be a byproduct for Sugar mills. Later, molasses are converted into rectified spirit to make potable or industrial alcohol. This rectified spirit, with around 95 per cent of the green fuel, is processed minutely to make Ethanol after dehydration.
“The Sugar package of Rs 70 billion announced by the government is certainly going to benefit distilleries in the long run, provided Ethanol price is increased by 1.5 times the current average cost of sugar production, which works out to Rs 34 a kg. This means, direct conversion of Ethanol from cane juice would become viable at Rs 52 a litre from nearly Rs 41 a litre being realised by Sugar mills currently,” said director general, Indian Sugar Mills Association (Isma).
The current price of Rs 41 a litre is not beneficial for Sugar mills to focus on Ethanol production. Thus, distilleries should be incentivized to make Ethanol production viable to balance excess Sugar production in the country. So, any price above Rs 50 a litre would be viable.