Sugar stocks and Ethanol Blending

The government of India on , 22 November 2012, said the 5% mandatory ethanol blending with petrol as already decided by the Cabinet Committee on Economic Affairs (CCEA) will be implemented across the country. The Ministry of Petroleum & Natural Gas will immediately issue a gazette notification for oil marketing companies (OMCs) to implement 5% mandatory ethanol blending with petrol from 1 December, 2012. 

SO, IF THE GOVERNMENT REALLY KEEPS ITS PROMISE THEN, IT  HAS ALRADY STARTED ALL OVER INDIA.  This step would be beneficial for companies like Renuka Sugar and Balrampur Chini.

Now, procurement price of ethanol will be decided henceforth between OMCs and suppliers of ethanol, a government statement said. In case of any shortfall in domestic supply, the OMCs and Chemical companies are free to import ethanol, the statement added. The government said it wanted to extend ethanol blending with petrol to all states in the country from present 13 states, which  is positive for the sugar firms like Bajaj Hindusthan Ltd and Shree Renuka Sugars Ltd..The decision is expected to improve demand for ethanol, which sugar factories produce as a bi-product.

It is expected that 5% bio-ethanol will be blended with petrol sold in all the states and Union Territories (UT) of the country, the government said. The Ethanol Blended Petrol (EBP) programme prior to this announcement or before this being implemented; in a total of 13 States had a blending level of about 2% against a mandatory target of 5%. A stable EBP programme would ensure sustainable benefits for the sugarcane farmers across the nation, the government said. It will ensure an alternative market for the farmers who frequently get adversely affected in case of bumper crop of sugarcane and lack of its demand in the market, the government statement said. It will also provide an incentive to small and medium farmers to increase efforts towards sugarcane crop as better returns would be ensured, the statement added.CLICK HERE.

EBP programme not only provides opportunities to sugarcane farmers, but it also ensures the use of ethanol as bio-fuel in a big way which is environment friendly, the government said. Besides, to the extent of implementation, this reduces the dependence on imported crude and leads the nation ahead on fuel self sufficiency, the statement added.