Potential Changes in Ethanol Prices and India's Ethanol Roadmap

04-Jan-2025 09:45 AM

Potential Changes in Ethanol Prices and India's Ethanol Roadmap
The Indian government is likely to increase ethanol prices by ₹1.50 to ₹1.70 per liter for the current Ethanol Supply Year (ESY), which began in November 2024. This hike will apply only to ethanol produced from sugarcane juice/syrup and B-heavy molasses. Prices for ethanol derived from maize, damaged grains (rice), and C-heavy molasses will remain unchanged.
Ethanol Prices for ESY 2023-24:
Maize: ₹71.86/L
Sugarcane juice/syrup: ₹65.61/L
Damaged grains (rice): ₹64/L
B-heavy molasses: ₹60.73/L
C-heavy molasses: ₹56.28/L
The subsidized price for ethanol from FCI-supplied rice (₹20/kg) has been discontinued.
The Cabinet is expected to approve the revised prices soon. According to ISMA, this adjustment is crucial to account for rising capital and input costs and to align ethanol pricing with fair and remunerative prices (FRP) for sugarcane.
Ethanol Production and Demand Outlook:
India's ethanol production capacity reached 1,683 crore liters by October 2024, sufficient to meet the 20% ethanol blending target by 2025-26. However, ISMA projects ethanol demand to rise to:
1,127 crore liters by 2025-26
2,994 crore liters by 2034-35
Meeting future demand will require significant capacity expansion.