'Decontrolling of sugar mills will boost ethanol export'

With the European Union (EU) subsidies being phased out and Pakistani ethanol losing its privileged status, the export market for the Indian sugar industry appears bullish.

India is the second largest producer of ethanol in Asia with an installed annual production capacity of around 2.7 billion litres. "But decontrolling of sugar mills will help the industry in a big way and ethanol exports will rise in the future, providing Indian distillers with new outlets," felt P Rama Babu, managing director, EID Parry (India) Limited.

The Centre had made the sale of petrol, doped with 5 per cent ethanol, mandatory in nine states (Andhra Pradesh, Goa, Gujarat, Haryana, Karnataka, Maharashtra, Punjab, Tamil Nadu and Uttar Pradesh) and four Union territories (Daman & Diu, Dadra & Nagar Haveli, Pondicherry and Chandigarh) under the ethanol blending programme.

The price offered by the oil companies is Rs 18.75 a litre for the supply of fuel ethanol. But in Andhra Pradesh, sugar mills and oil companies are yet to agree on the price.

In Tamil Nadu, the price of rectified spirit is Rs 18 per litre, while in Andhra Pradesh, it is about Rs 23-24. "But the Tamil Nadu sugar industry feels it is viable to supply anhydrous ethanol at Rs 18.75," Rama Babu added.

Following the model of its Nellikuppam unit, EID Parry, which accounts for nearly 20 per cent of the state's sugar production, is in the process of setting up integrated sugar complexes in all its units in Pugalur in Karur district, Pudukottai in Pudukottai district and Pettavaithallai in Trichy district, he added.