Govt allocates 2.8 MT of rice at subsidised rate for ethanol from surplus stock

By Sandip Das

To reduce stockpile, the food ministry has allocated 2.8 million tonne (MT) from the central pool stock to be supplied to distilleries for ethanol production at subsidised rate of Rs 2250/quintal.

Sources told FE that the new allocation is in addition to 2.4 MT of grain currently being supplied to biofuel manufacturers from the surplus rice stocks of Food Corporation of India (FCI).

FCI has projected economic cost of rice including minimum support price (MSP), storage, transportation and other costs at Rs 4173/quintal for 2025-26. Currently the corporation holds 61 MT of rice which include grain receivable from millers against the buffer of only 13.58 MT for April 1.

The supplies of subsidised rice under the open market sale scheme of FCI to ethanol makers would be till October 31, 2025

“With the additional allocation of rice, the raw material supplies to units would be sufficient,”Abhinav Singal, treasurer, Grain Ethanol Manufacturers Association (GEMA), told FE.

About 70 odd Grain based ethanol manufacturers contribute about 65% of the 1000 crores litres of biofuel produced in the country annually while the rest is produced from sugarcane.

Grain-based ethanol manufacturers across Punjab, Haryana, Uttar Pradesh, Maharashtra, Madhya Pradesh, Bihar, West Bengal and Tamil Nadu currently using maize or rice as main feed stock.

In August last year, the government lifted a 13 months ban on rice sales to ethanol distilleries by sanctioning purchase of 2.3 MT from the central pool grain stocks for distilleries at Rs 28/kg excluding transportation cost.

This article has been republished from The Financial Express.