Increase in the price of ethanol produced from C-heavy molasses

30-Jan-2025 01:10 PM

The increase in the price of ethanol produced from C-heavy molasses is a notable development, particularly as it reflects a broader push by the government to encourage ethanol production while balancing other concerns like sugar production.

The slight 3% rise in the price of C-heavy molasses ethanol, from Rs 56.58 to Rs 57.97 per liter, suggests a focus on incentivizing producers while maintaining price stability for other forms of ethanol, such as from corn, sugarcane juice, and rice.

The government’s decision to not increase the price for ethanol produced from corn or sugarcane juice and syrup is likely a measure to keep fuel prices in check while supporting the 20% ethanol blending target.

The move to stabilize ethanol prices from these sources is particularly important for ensuring there is no disruption to sugar production, which could be a concern with increased use of sugarcane juice in ethanol production.

Additionally, the deregulation of sugarcane use and the reduction of subsidized rice price from the Food Corporation of India (FCI) at Rs 2250 per quintal appear to be steps to drive up ethanol production without jeopardizing food security or sugar production.

These steps could also help lower overall production costs of ethanol, which in turn helps in achieving the blending targets and reducing reliance on imported fuel.

It’s interesting that the government seems to be steering clear of incentivizing B-heavy molasses for ethanol production, possibly due to its lower sugar content and the potential competition it poses to sugar production.

What do you think about the overall impact of these decisions on the ethanol industry and fuel blending targets?