India's 2012 ethanol output likely to rise 29%

USDA report says production to rise on the back on higher sugar production

The country's ethanol production is likely to increase by 29% to 2,170 million litres in 2012 on the back of higher sugar production, says a latest USDA report.

India, which produces conventional ethanol from sugar molasses, is estimated to manufacture 26 million tonnes of sugar in the 2011-12 marketing year ending September, higher than the domestic demand of 22 million tonnes.

In a recent report, the US Department of Agriculture (USDA) has pegged India's ethanol production at 2,170 million litres in 2012, against 1,681 million litres last year.

Total supply of ethanol in the country is expected to be 2,901 million litres, including import of 80 million litres of ethanol this year, it said in the report.

Whereas domestic consumption of ethanol is estimated to rise marginally by 4.5% to 2085 million litres this year from 1995 million litres in 2011, it said.

About 880 million litres of ethanol is likely to be used in manufacturing of portable liquor, 720 million litres for industrial use and 400 million litres for blended gasoline in 2012, it added.

Ethanol and alcohol production in India depends largely on availability of sugar molasses, a byproduct of sugar production.

Out of 330 distilleries in India, the USDA noted that about 140 have the capacity to distill around 2 billion litres of conventional ethanol per year and could meet the demand for five% mandatory blending of ethanol with petrol.

In January 2003, the government mandated a 5-percent ethanol blend in gasoline through its ambitious Ethanol Blending Program (EBP). The programme has not yet picked up on failure to set ethanol pricing formula and procedural delays by various state governments.