Ethanol Pricing Disparity Threatens Sugar Industry Stability
Jaiprakash Dandegaonkar of the National Federation of Cooperative Sugar Factories Ltd highlights the challenge sugar firms face due to disparate rates for grain-based and sugarcane-based ethanol, urging government intervention for rate parity. Ethanol production has been a key additional revenue for sugar factories.
Sugar firms are feeling the heat from a pricing discrepancy in ethanol production, as top sugar cooperative official Jaiprakash Dandegaonkar raises concerns over government policy. The Maharashtra government's decision to utilize food grains like maize and rice for ethanol production can jeopardize investments in sugar mills, Dandegaonkar stated.
The disparity lies in the purchase rates, with grain-based ethanol fetching around Rs 72, while sugarcane-based ethanol is priced between Rs 61-65. Further complicating the issue, sugar-based ethanol ranges from Rs 55 to 65 depending on the material. This pricing imbalance could undermine the financial stability of sugar companies relying on ethanol as an additional income stream.
Dandegaonkar advocates for equalizing ethanol rates to bolster sugar mills and farmers. Highlighting last year's data, he noted that only 32% of ethanol purchased was derived from sugarcane, with the rest grain-based. He calls for a sustainable, long-term strategy that limits sugar production, allowing surplus resources like cane juice and molasses to shift toward ethanol production.
(With inputs from agencies.)
Google News