February 4, 2016
Sugaronline | http://goo.gl/rIXP1C
Around 328.8 million litres of ethanol has been approved for sugar mills in Maharashtra in a recent tender floated by oil marketing companies (OMCs), according to India’s Financial Express.
This is perhaps the first time that 53 sugar factories that have ethanol plants in the state have come forward to bid for ethanol, top officials of the Maharashtra State Cooperative Sugar Factories Federation (MSCSFF) said.
While some 420 million litres has been allocated for Maharashtra, some 53 sugar mills have bid for 376 million litres of ethanol which means sugar mills can earn a revenue of some INR16.92 billion (US$248.2 million), Sanjeev Babar, MD of the federation said. Of the finalised 376 million litres, around 5 mills have contracted the bids outside of Maharashtra to the tune of some 580,000 litres, which leaves 328.8 million litres as the ethanol to be provided by mills in Maharashtra, he said. This is the third tender that has been floated by oil marketing companies. Dismissing speculation that the state perhaps could not meet the targets because of the drought situation in some parts, Babar said that this time, mills have been active on the ethanol front.
Ethanol rates have been fixed at INR47.6 per litre and after taxes mills should get at least INR45 per litre, he said. In the first tender which was floated in September 2015, some 26.4 million litres of ethanol was contracted from Maharashtra. In October, some 246.6 million litres was Maharashtra’s share of the national supply. Maharashtra contributes 50% of the country’s ethanol requirements. Last season, OMCs had floated a expression of interest (EoI) with a demand for 210 million litres of ethanol from Maharashtra.
However, then it was distilleries in the state that supplied the required ethanol, since the cane crushing season had almost come to an en. This time, however, the mills have been active in participating in the ethanol programme, he said. The funds coming from ethanol should leave more finances in hand for mills to make farmer payments.
In September last year, the food department had asked Uttar Pradesh, the country’s biggest producer of cane and ethanol, to supply 560 million litres of ethanol a year. UP, however, has the capacity to produce only 350 million litres of ethanol annually. Similarly, Maharashtra has been asked to supply 530 million litres and Karnataka 250 million litres of ethanol a year, whereas their capacities to produce this bio-fuel stand at 200 million litres and 230 million litres, respectively. Currently, while the country has the capacity to produce 2.24 billion litres of ethanol a year, OMCs have floated expression of interests seeking supplies of 2.66 billion litres for implementing the 10% blending plan across the country.
Last year, OMCs had sought 1.5595 million litres of ethanol from sugar mills in 2014/15.
This year, OMCs have sought some 2.62 billion litres. Maharashtra has 68 ethanol manufacturing plants with a total production capacity of 720 million litres. According to recent Union petroleum ministry data, in 2015, UP produced 560 million litres of ethanol against Maharashtra’s 520 million litres. The two states together accounted for nearly 67% of country’s total ethanol production of around 1.61 billion litres a year.