Allocation of government rice for ethanol production increased to 52 lakh tons

08-May-2025 12:27 PM

New Delhi. Akbar's court poet Rahim once said, "Jo jal badhe naav mein, ghar mein badhe daam, dono haath ulichiye, yehi sayano kaam," meaning when water fills a boat or wealth accumulates at home, a wise person will work quickly to remove the excess.

This sentiment appears to reflect the current situation with the government's rice stock and its marketing strategy. With a massive surplus of rice in the central pool, the government is making all efforts to reduce the stock. As part of this strategy, it has more than doubled the rice quota allocated for ethanol production.

Previously, the central government had allotted 24 lakh tonnes of rice from its stock for ethanol manufacturers. This has now been increased by 28 lakh tonnes, taking the total allocation to 52 lakh tonnes.

The sale price remains unchanged at Rs 2250 per quintal, or Rs 22,500 per tonne. As a result, grain-based distilleries can now procure up to 52 lakh tonnes of rice from the Food Corporation of India (FCI) warehouses at this price, which is expected to boost ethanol production.

It is notable that of the original 24 lakh tonnes quota, less than 10 lakh tonnes had been lifted by ethanol manufacturers.

Despite this, the government has gone ahead with the additional allocation of 28 lakh tonnes, signaling a strong intent to reduce the excessive rice stock held in the central pool. This urgency likely stems from concerns over limited safe storage capacity for food grains.

This total quota of 52 lakh tonnes for ethanol distilleries applies to the current 2024-25 ethanol marketing season, which runs from 1 November 2024 to 31 October 2025. With about 10 lakh tonnes already sold, the remaining 42 lakh tonnes will be available for purchase over the next seven months.