India’s ethanol blending programme is likely to face challenges next year as sugarcane and food grain availability is expected to decline due to the uneven spread of monsoon rains, according to experts.
Erratic and uneven rainfall this year has affected sugarcane and rice cultivation in the country, which means less will be available for the distilleries. State-run Food Corporation of India (FCI) has already stopped supply of rice for ethanol production owing to an expected shortfall of rice for general consumption.
Maharashtra and Karnataka, which together contribute about 45% to the country’s ethanol blending programme, expect a fall of 10-15% in sugarcane yield (per acre production), as delayed monsoon has scorched the standing crop on about 10-15% of crop area. There is also a reduction of over 10% in the area under cane in these two states.
According to the latest sowing report of kharif crops, the all-India acreage under sugarcane is higher by about 5% from last year, with most of the increase in area reported from Uttar Pradesh. The area under cane in Maharashtra is expected to decline by more than 12%.
Based on the state-wise ethanol procurement allocation done by the oil marketing companies for the current year (Decembar-November), Maharashtra and Karnataka account for more than 45% of the total allocation. As a result, industry experts think that an increase in UP’s cane acreage can only partially compensate for the fall in ethanol production from Maharashtra and Karnataka
Two factors will influence the production of ethanol in the country in the next season, including prices of sugarcane and ethanol, and secondly the production of sugarcane,” said veteran sugar industry consultant Vijay Autade. “If the prices of sugar are more lucrative than the ethanol prices, sugar millers will be inclined to produce more sugar. However, if sugarcane production falls significantly, then the production of ethanol can suffer irrespective of its prices
Maharashtra’s Solapur district accounts for almost 20% of the state’s sugar production, and is expected to see a drop of more than 25% in sugarcane production, according to industry experts.
“Almost all the sugarcane growing areas in Karnataka and Maharashtra suffered a prolonged dry spell and intense heat from March till mid-July,” said Satyajit Jagtap, president (trading), Baramati Agro. “We are afraid that the yield of 10-15% of the standing crop of sugarcane in these two states may decline significantly even if the rainfall improves during the remaining period of the monsoon season.”
Source: The Economic Times
