The price of rice and maize of Food Corporation is not beneficial for ethanol production

14-Oct-2024 11:10 AM

New Delhi. Although the central government has given permission to the distilleries to supply rice from their stock to the Food Corporation of India for ethanol production and has also fixed its quantity up to 23 lakh tonnes,

but its export price is considered to be high, which is not proving to be economically beneficial for ethanol exporters because rice is available at a lower price in the open market.

Industry critics say that to attract distillers to buy this rice, the government will either have to reduce the price of this food grain or increase the selling price of ethanol produced from grain.

According to a leading analyst, although ethanol manufacturers were waiting for government rice for a long time, its price is not beneficial for them.

In the last week of August, the issue price of government rice was Rs 31.50 per kg, while the cost of reaching it to the ethanol factory was Rs 32 per kg. On the other hand, this variety or rice was being sold between Rs 29-30 per kg in the open market.

According to analysts, the cost of ethanol produced from rice worth Rs 32 comes to Rs 72 per liter, while its price is fixed at Rs 58.50 per liter. In fact, 450 liters of ethanol is produced from one ton of rice.

Similarly, the price of maize is also going high. The government has increased its minimum support price to Rs 2225 per quintal, while the open market price is above this.

The government has planned to buy maize at this support price and sell it to ethanol manufacturers, which will cost more.

The quality of rice or maize is not necessary to be very good for ethanol production and hence ethanol manufacturers can manage their work by buying light goods from the open market.