Ethanol price not viable: Sugar industry honcho

November 17th, 2008 - 10:08 pm ICT by IANS  

New Delhi, Nov 17 (IANS) The current price of ethanol fixed for blending is not viable to support the government’s blending programme, a top sugar industry leader said here Monday.“Rs.21.5 per litre (for ethanol) was (fixed) when the cane price was much lower and sugar prices were much lower… So this is not a very viable ethanol price that the marketing companies are giving,” Dhruv Sawhney, chairman of Triveni Engineering and Industries Ltd, said on the sidelines of the World Economic Forum-India Economic Summit.

The government has ordered that ethanol blending in petrol and diesel would increase to 10 percent from October this year.

Sawhney said the parity price of sugar to ethanol cannot be fixed like Brazil, instead it will vary from period to period. “In Brazil, they can shift production from cane juice to ethanol. But, here we produce ethanol from molasses, so we can manufacture both sugar and ethanol together,” he said.

He added that the first priority of the sugar industry is to protect the sugarcane farmers, without which the industry cannot survive. “We have to protect the farmer on a long-term and diversified basis. The oil companies say that it is not our problem,” he added.

Sawhney said sugar production for the year ended Sep 30, 2008, had come down to 20 million tonnes from 28.3 million tonnes in the corresponding previous period.

“The reason was less area under cane and the (adverse) weather conditions,” said Sawhney.

“The production will be even less for the current year starting from Oct 1, 2008, which will be just 21 million tonnes, with demand estimated at 23 million tonnes,” he said.

On Triveni’s retail venture, he said there were plans to add three to four more stories to its existing range of 40 shops.

“Everybody was saying that the scenario was gloomy this Diwali, but it was not too bad in class II and III towns,” he added.

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