Huge quantity of rice expected to be used in ethanol production

27-Jun-2025 03:40 PM

New Delhi. The government has allocated a record amount of rice for ethanol production, which will help reduce the excessive stock in the central pool. India remains the world’s largest producer and exporter of rice.

A few years ago, the government did not have enough rice for the ethanol industry, but the situation has now shifted from scarcity to surplus. This turnaround has been significant.

Previously, the government had to impose several restrictions to manage domestic rice availability. These included banning the commercial export of 100 percent broken rice and whole raw (white) rice, imposing a 20 percent customs duty on Basmati Sela rice, and fixing a minimum export price of $1200 per tonne for Basmati rice.

However, over time, all these restrictions were lifted. Currently, government warehouses hold a huge stock of rice, and domestic supply and availability remain stable, enabling exporters to secure rice at reasonable prices for shipments.

To support ethanol production, the Food Ministry initially allocated a quota of 24 lakh tonnes of rice for sale to distilleries at a fixed price of ₹2250 per quintal.

This quota was later increased to 52 lakh tonnes. According to official sources, the government's primary goal is to maintain an adequate buffer stock of rice in the central pool. However, since the current stock exceeds the required level, the decision was made to divert a portion of it for ethanol manufacturing.

This record allocation of 52 lakh tonnes by the Food Corporation of India represents nearly 9 percent of the total global exports in the 2024–25 marketing season. In contrast, last year, less than 3000 tonnes of rice was supplied by FCI for ethanol production.