Oil Marketing Companies (OMCs) of the country has finalized procurement of a quantity of 113 crore litres of ethanol for 2017-18 (December-November) sugar season (SS). The quantity of 113 crore litre for 2017-18 season is higher than the best ever ethanol supply of 113 crore litre made in 2015-16 (Dec-Nov) SS and around 66 crore litre lifted by OMCs for the programme in 2016-17 (Dec-Nov) SS.
According to Indian Sugar Mills Association (ISMA), the sugar companies and ethanol manufacturers have submitted bids for supply of a total quantity of 155 crore litres by November 10, 2017, the closing date for submission of bids and the OMCs have finalized just 113 crore litres for supply during 2017-18 season.
Considering past practice of OMCs floating second round of tender for additional quantities, recent pro- active steps taken by GoI & OMCs in ethanol procurement as well as non acceptance of 42 crore litres as offered by manufacturers (sugar companies and ethanol manufacturers) and a total of 313 crore litres is required for 10% blending across the country, the quantity for ethanol supply finalized for 2017-18 season may go up significantly going forward.
Of the 75.9 crore litres offered by UP based sugar companies and ethanol manufacturers, the procurement quantum was fixed at 44.3 crore litres and in case of Maharashtra based manufacturers the procurement quantum finalized was 40.3 crore litres as against an offer of 50.4 crore litres. So in case of second round of tender for additional supplies the manufacturers based out of these two states will be major gainers.
According to ISMA at an ex-distillery procurement price of Rs. 40.85 per litre and procurement of the finalized quantity of 113 crore litres, the revenue realization during 2017-18 by the sugar industry/ethanol suppliers would be over Rs 4500 crore. This, in turn, will significantly help the sugar industry in making payments of cane price to the farmers.
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