Government mulling raising ethanol prices, MSP of sugar

NEW DELHI: The government is considering increasing ethanol prices, raising minimum selling price (MSP) of sugar, and reviewing the export of the sweetener, food and consumer affairs minister Pralhad Joshi said on Thursday. He also said that his ministry has written to Niti Aayog to prepare a roadmap for increasing the target of ethanol blending in petrol to 25%.
The govt is confident of achieving the 20% target by March 2026 with this year the overall ethanol blending touching 14%. The sugar industry majors have vowed to increase ethanol production, though they have sought a hike in price of the green fuel.
Responding to questions on the possibility of hiking ethanol prices on the sidelines of a global conference organised by industry body ISMA, Joshi said, “The petroleum ministry is seized of the matter. We are in touch with the petroleum ministry. It is well under consideration to hike the ethanol price.” On the issue of allowing sugar export, he said govt will take a decision after looking into next year’s production and availability of the sweetener. Joshi was optimistic about sugar production for the 2024-25 season starting October, citing good monsoon.
Joshi also said a committee of secretaries is deliberating on a proposal to increase the minimum selling price (MSP) of sugar in response to a demand from the industry. The MSP fixed by the govt has remained at Rs 31 per kg since February 2019.
Earlier, ISMA president M Prabhakar Rao urged the govt to increase the sugar MSP to at least Rs 39 per kg and allow exports of 20 lakh tonne considering good harvest in the coming season. Association vice president Gautam Goel said exports should be allowed immediately as global prices have firmed up in the last two weeks on reports of likely drop in production in Brazil and India can regain lost market share.
Meanwhile, speaking at the event, Union food secretary Sanjeev Chopra said sugar remains the key source of getting ethanol, though there had been talks of whether sugar-based ethanol is the right way to go forward considering the water consumed by the cane crop. He added that a detailed study conducted involving govt institutes on sugar, maize and rice found that while one litre of ethanol produced from sugarcane requires 3,630 litres of water, maize needs 4,670 litres and rice requires 10,790 litres.