INDIA: Ethanol supplies from mills for blending will increase 71% to record 1.13 billion litres

Published: 12/07/2017, 4:57:58 PM

Ethanol supply to oil marketing companies for blending with petrol will rise 71% in 2017/18 season to touch record 1.13 billion litres, helping sugar mills to earn INR45 billion (US$696.9 million) revenue, according to ISMA.

Indian Sugar Mills Association (ISMA) said around 660 million litres of ethanol was lifted by OMCs (oil marketing companies) for the ethanol blending programme in 2016/17 season (December November). The previous record was 1.11 billion litres in 2015/16.

ISMA attributed the jump in ethanol supply during 2017/18 to improvement in ethanol procurement price by almost 5% over last year and increase in sugarcane availability giving more molasses production.

"Out of 1.55 billion litres of bids submitted by sugar companies and ethanol manufacturers, 1.13 billion litres have been finalised for supply during 2017/18 season," ISMA said in a statement.

Tenders were floated by OMCs, inviting bids from sugar mills and ethanol manufacturers for supply of ethanol.

"At an ex-distillery procurement price of INR40.85 per litre and procurement of the finalised quantity of 1.13 billion litres, the revenue realisation during 2017/18 by sugar industry/ethanol suppliers would be over INR45 billion," ISMA said, adding this will help in making cane price payment.

Sugar companies and ethanol manufacturers submitted bids for a total quantity of 1.55 billion litres, the highest ever quantity offered by sugar mills and ethanol manufacturers.

ISMA said 3.13 billion litres of ethanol is required for 10% blending across the country. The offer of 1.55 billion litres was sufficient for 5% blending.

"Since the bids for several oil company depots were more than the required quantity of the depot for 10% blending therein, proportionate quantities have been accepted by the OMCs.

"Accordingly, out of 1.55 billion litres of bids submitted by sugar companies and ethanol manufacturers, 113 billion litres have been finalised for supply during 2017/18 season," the statement said.

The OMCs might float a second round of tender for more quantities, ISMA hoped.

Out of the 1.13 billion litres finalised by OMCs, the largest quantity will be supplied by sugar companies and ethanol manufacturers in Uttar Pradesh at 443 million litres, followed by Maharashtra at 403 million litres.

As per the finalised quantities, the ethanol blending with petrol percentages will be excellent in UP at 9.6%, followed by Maharashtra at 8.6% and Bihar at 7% during this season.