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Sugar mills hoping for recovery in ethanol blending with petrol this year

During the last season, 2016-17 droughts in some parts of Maharashtra, Tamil Nadu led to less sugarcane output and hence, lower availability of ENA

Dilip Kumar Jha 

Sugar mills

After slowing down to a mere 2.5 per cent last year, are hoping for a recovery in blending with this year, due to a significant increase in cane output and thereby proportionate improvement in the availability of extra-neutral of alcohol (ENA). ENA is a derivative of sugar manufacturing and a pre-form of

In November 2012, the (CCEA) approved five per cent mandatory blending of with which was notified by the Centre under the on January 2, 2013. According to the Act, (OMCs) had to record five per cent content in by June 30, 2013 and 10 per cent thereafter. However, considering weak supply orders on unremunerative price offer, OMCs managed to achieve a maximum of around 1,110 million litres equivalent to 4 per cent of blending for 2015-16 (November – October).

Graph
Source: Ministry of Agriculture
During the last season, i.e. 2016-17, however, drought in some parts of major cane growing regions in and Tamil Nadu led to less output and hence, lower availability of ENA. Consequently, were able to supply 710 million litres equivalent to around 2.5 per cent of blending.

“This year, however, we are expecting improvement in supply due to an increase in cane availability across the country. Cane output in India’s two large cane growing states i.e. and is estimated to remain significantly higher this year than last year. Hence, crushing is expected to be more resulting into higher quality of supply to the OMCs,” said Abinash Verma, Director General, Association (ISMA).

estimates to achieve over 4 per cent of blending during the supply season 2017-18 (December – November).

The First Advanced Estimates from the Union Ministry of Agriculture forecasts India’s output at 337.69 million tonnes for 2017-18 compared to its actual production at 306.72 million tonnes during the previous year, witnessing thereby an increase of 10 per cent. Experts, however, believe that the latest spell of rainfalls would increase recovery in the standing cane crop. Hence, ENA output and conversion of might be proportionately higher this year.

Sugar mills, however, cautioned that OMCs need to float its procurement tender and finalise the quantity of order before November 30 i.e. till the ongoing supply tender ends. For which, the OMCs require to float an procurement tender now to have at least three weeks of time for to apply for their possible quantity of supply. Again, negotiations of price between OMCs and and finalising orders require another three- four weeks.

“This means, procurement tender needs to be floated today. Any delay in floating tender would result into proportionate delay in the entire eco-system. By then, also initiate talks with chemical and potable alcohol manufactures. So, delay in floating tender would reduce the quantity of supply to OMCs,” said a senior industry official on condition of anonymity.

Last year, Bharat Petroleum Corporation Ltd (BPCL) had floated an procurement tender on behalf of all OMCs with opening date on October 22 and due date of November 11, 2016. Because of the delay in floating tender, the entire eco-system of finalising order got delayed resulting into lower supply of

Experts, meanwhile, believe that the in supply around half of quantity required by OMCs. Because of higher cane availability, supply could have been more even last year. But, by the time OMCs floated tender, had contracted with potable alcohol manufacturers. Therefore, were able to supply only 25 per cent of the tendered quantity of 2800 million litres last year, a leading supplier said.

First Published: Mon, October 16 2017. 01:37 IST
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