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Alka Kshirsagar

Pune, June 22

The sharp rise in cost of molasses, currently the raw material for ethanol production in Maharashtra, is likely to cast a shadow on a meeting of representatives of oil companies and ethanol manufacturers in Pune on June 26, with the latter privately maintaining that it is ‘unviable’ to supply ethanol at the price fixed.

The objective of the conclave, being held under the aegis of the Sugar Commissioner, Mr Rajgopal Deora, is to bridge the gap between demand and supply of ethanol for oil companies to produce 5% ethanol blended fuel (E5).

The meet also aims at mapping the locations of ethanol manufacturing units with the 11 oil depots in the State to improve logistics.

Though the major driver for the meet is escalating price of petrol (higher percentage of ethanol blending can lower petrol cost by a few rupees per litre), the rising price of molasses, and consequent higher cost of ethanol production, may prove to be a dampener.

According to a senior official of the sugar lobby, the rise in price of molasses, which is also used as animal feed, is mainly on account of growing exports.

While 90,000 tonnes of them were exported during 06-07, the figure the following year was 3.1 lakh tonnes, a substantial rise of nearly 250 per cent.

As a result, the cost of molasses that ranged between Rs 680 and Rs 1,500 a tonne during 07-08, has shot up to Rs 2,500-3,500 during the first quarter of 08-09.

With sugar production in Maharashtra next year pegged to fall by around 30 per cent and the fact that molasses production is four per cent of sugarcane crushed, it seems unlikely that prices of the commodity will head south any time soon.

Every tonne of molasses yields around 260 litres of rectified spirit (RS) that is used to make potable alcohol and industrial alcohol. The RS needs to be further dehydrated to produce ethanol, and that involves an added cost which, an RS manufacturer says, renders the price of Rs 21.50 fixed for ethanol production unviable.

Maharashtra is second only to Uttar Pradesh in sugar production. Dr B.T. Badhan, Joint Director, By-products, Sugar Commissionerate, says that with 32 co-operative and 48 private manufacturers in the fray, the State has the installed capacity to produce around 90-95 crore litres of ethanol every season.

At full capacity utilisation, this can enable 10 per cent blending in petrol.

More Stories on : Sugar | Non-conventional Energy | Exports & Imports | Breweries

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