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ISMA welcomes Govt’s decision to hike ethanol prices

ISMA has welcomed the decision of the Government to increase the ex-mill price of ethanol by almost Rs. 3 per litre to Rs. 43.70 per litre for the next contract period starting from December 1, 2018

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The Indian Sugar Mills Association (ISMA) has welcomed the decision of the Government to increase the ex-mill price of ethanol derived out of the ‘C’ heavy molasses i.e. final molasses, by almost Rs. 3 per litre to Rs. 43.70 per litre for the next contract period starting from December 1, 2018.  At 5 percent blending, when around 160 crore litres of ethanol is required, ethanol manufacturers will get an additional realisation of around Rs. 480 crore in the next sugar season.

For the first time ever, the Government of India has decided to encourage production of ethanol for blending with petrol from sugarcane juice and ‘B’ heavy molasses by fixing a higher price for this ethanol at almost Rs. 4 per litre above the price of ethanol made from ‘C’ heavy molasses. This ethanol made from ‘B’ heavy molasses and sugarcane juice will be by way of sacrificing some sugar, which is currently being produced from this feedstock, and therefore needs a higher price which the Government has now decided.

“This innovative step to encourage diversion of ‘B’ heavy molasses and sugarcane juice away from surplus production of sugar into ethanol, will go a long way in balancing surplus sugarcane availability in future. The industry would respond positively by creating new ethanol production capacities in the next few years. This is a long-term measure which will bear fruits in the medium term and give positive results for the betterment of the sugarcane farmers and sugar producers," Abinash Verma- DG, Indian Sugar Mills Association.

On Wednesday, the Cabinet Committee on Economic Affairs chaired by Prime Minister Narendra Modi had approved the Mechanism for procurement of ethanol by public sector oil marketing companies (OMCs) to carry out the ethanol blended petrol (EBP) programme. The new mechanism will fix the ex-mill price of ethanol derived out of C heavy molasses to Rs.43.70 per litre from prevailing price of Rs.40.85 per litre. The ex-mill price of ethanol derived from B-heavy molasses and sugarcane juice will be at Rs.47.49 per litre.

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