OMCs hike procurement price of ethanol produced from maize by Rs 5.79/ltr

In sugarcane it is either through sugarcane juice or syrup, then B-heavy molasses and C-heavy molasses, while in grains it is mostly damaged foodgrains or maize

In a boost to the ethanol blending programme which has been strutting following the decision to stop production from sugarcane juice, the oil marketing companies (OMCs) announced a Rs 5.79 per litre increase to Rs 71.86 a litre in procurement price of ethanol produced from maize for the 2023-24 supply year that started in November.

This would make the procurement price of ethanol produced from maize as among the highest in all the sources through which the fuel is produced in India. Ethanol is produced in India from either sugarcane based molasses or grain based sources as feedstock.

In sugarcane, it is either through sugarcane juice or syrup, followed by B-heavy molasses and C-heavy molasses, while in grains it is mostly damaged foodgrains or maize. 

The decision coming days after the OMCs hiked the procurement price of ethanol produced from C-heavy molasses by Rs 6.78 per litre, the step should go a long way in boosting production of the fuel from both sugarcane-based molasses and grains and achieve the 15 per cent blending ethanol in 2023-24. India plans to blend to 20 per cent ethanol with petrol by 2025.

“The grains-based ethanol manufacturers are thankful and grateful for the decision to hike the procurement price. We had asked for a Rs 10 per litre increase in the price of maize-based  ethanol but have got Rs 5.79 per litre hike. We look forward to their continued support,” Dr C K Jain, President of Grain Ethanol Manufacturers Association (GEMA) said.

Earlier, the Central government had laid down plans to encourage Nafed and NCCF to purchase as much as 100,000 tonnes of maize directly from farmers for supplying to the distilleries for making ethanol at cheap rates.

In 2022-23 season, in the just concluded ethanol supply year of 2022-23 (December-October), sources said of the 4.94 billion litres of ethanol supplied to the OMCs a quarter estimated to be around 1.26 billion litres came from sugarcane juice or syrup as feed stocks, while 2.33 billion litres (around 47 per cent) came from B-heavy molasses, while the rest around 1.30 billion litres came from grain-based sources.

C-heavy molasses contributed 0.06 billion litres of the total quantity of ethanol supplied to the OMCs in 2022-23.

In 2023-24 ESY, sources said of the 5.62 billion litres of ethanol promised to be supplied to the OMCs, around 2.69 billion litres would come from sugarcane based molasses while 2.92 billion litres would come from grains.