Cargill India is keen to invest in facilities to produce ethanol out of corn. It however would wait for a clear policy on the green fuel, as the current schemes of the government are “skewed in favour of sugar mills”, according to the The Financial Express newspaper.
“We are producing ethanol out of corn in the US and it is a big part of our business there. We are looking at opportunities here, depending on the government policy,” Cargill India’s president Simon George told the newspaper.
He said the company would take a call after assessing how attractive is the ethanol policy once it is announced.
The all-India weighted average price of corn was Rs 1,307 per quintal during October 1-November 24, which is nearly 30 per cent lower than its minimum support price (MSP).
Many other companies like Cargill are waiting for the ethanol policy as the current one allows ethanol made out of only molasses (produced by sugar mills) to be eligible for buying by oil marketing companies (OMCs) under the blending programme. Though the government has allowed ethanol production out of grains, there is no such policy like sugar mills for it.
The government last month hiked by Rs 1.94-3.34/litre in the reserve prices of different categories of ethanol to be purchased by OMCs under the ethanol blending programme (EBP) during the 2020-21 season (December-November) to help sugar mills earn more and clear the cane dues of farmers.
The declining realisation from sugar sales over the last few years added to the government’s target of blending 20 percent ethanol with petrol have forced the sugar factories to diversify into the green fuel.
Though ethanol procurement by the public sector OMCs has increased over the last few years, it is far below the annual target of 460 crore litre to achieve 10% blending with petrol. The OMCs had purchased 38 crore litre of ethanol in 2013-14 season while the contracted quantity was about 195 crore litre in 2019-20.