Tender for supply of 110 crore liters of ethanol produced from FCI rice

20-Jan-2025 04:09 PM

The Indian government is expected to issue tenders soon for the supply of approximately 110 crore liters of ethanol for the 2024-25 marketing season.

This ethanol will be produced exclusively from rice provided by the Food Corporation of India (FCI). The supply season started in November 2024 and will last until October 2025.

As part of the initiative, the FCI will sell rice to ethanol manufacturers at a subsidized price of Rs 2250 per quintal, a reduction from its earlier price of Rs 2285.

This subsidy is part of the government's strategy to support ethanol production and promote biofuels. A total of 24 lakh tonnes of rice have been allocated for sale to ethanol distilleries.

This move follows a previous decision by the Food Ministry to reduce the issue price of FCI rice, which initially had been set at Rs 28 per kg, but was later lowered to Rs 22.50 per kg. This price reduction aims to make ethanol production more cost-effective.

Additionally, if there is a shortage of ethanol produced from other raw materials like maize, the government has allowed the conversion of rice into ethanol, potentially increasing the quota of rice allocated to ethanol manufacturers.

Industry analysts view this as a positive development, as it provides distilleries with more flexibility in sourcing raw materials.

If distilleries face challenges in procuring maize or rice from the open market, they can turn to FCI rice to meet their supply requirements, ensuring a steady flow of ethanol to oil marketing companies.