Sugar mills get 312 cr litres ethanol orders from oil marketing companies for 2024-25 season

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Oil Marketing Companies (OMCs) have allocated 837 crore litres of ethanol to distilleries for supply during the 2024-25 Ethanol Supply Year (ESY), which runs from November to October. Of this, the contribution of the biofuel to be made out of damaged foodgrain (a term used for rice) will be 94 crore litres. It will have to be produced from over 2 million tonnes (mt) of rice.

As the sugar-based distilleries are expanding to dual-based feedstock with creation of 126 crore litres so far, and with the rise in standalone grain-based distilleries (capacities 742 crore litres in total so far) coming up in last few years, the capacities have substantially gone up to 868 crore litres. On the other hand, sugar-based distilleries have a capacity to produce 941 crore litres of ethanol. Of this, 815 crore litres are by only molasses-based and 126 crore litres by dual feed plants.

The latest allocation of OMCs show the importance of grain-based distilleries, which rely mainly on maize (corn).

First 2 quarters allocation

The allocation in the first two quarters (November-April) of 2024-25 show that OMCs will buy 235 crore litres from sugar-based plants – 185 crore litres to be made out of sugarcane juice/syrup, 44 crore litres out of B Heavy Molasses (BHM) and 6 crore litres from C Heavy Molasses (CHM).

On the other hand, as high as 231 crore litres will be purchased from grain-based distilleries out of which 188 crore litres have to come from maize as feedstock and the remaining 43 crore litres from rice as feedstock.

However, OMCs have not mentioned the price they will purchase the ethanol at. The distilleries hope that OMCs will soon announce the new rates to be applicable in 2024-25 ESY, raising the ethanol prices from the previous levels.

Last 2 quarters demand

The first two quarters are important for the sugar mills as the crushing season also coincides with ethanol and maximum quantity is produced in these six months. For the last two quarters of ESY, sugar-based distilleries have received orders worth 75 crore litres, which is less than 25 per cent of their total order of 312 crore litres for the whole year.

At macro level, the maize-based distilleries have received orders worth 431 crore litres, which is nearly 52 per cent of the 837 crore litres OMCs to buy in 2024-25 ESY. This is followed by 189 crore litres from sugarcane juice, which is 23 per cent share in the total order, BHM at 114 crore litres (14 per cent), damaged foodgrains at 94 crore litres (11 per cent) and CHM at 9 crore litres (1 per cent).