Market News
3 min read | Updated on August 13, 2024, 16:45 IST
SUMMARY
The jump in sugar stocks came after news agency PTI, citing sources, reported that the government is considering a proposal to increase ethanol prices for the season starting November 2024.
Stock list
Ethanol prices, fixed by the government, have remained unchanged since the 2022-23 season
The buzz over the possible increase in the price of ethanol by the Centre fueled sugar stocks on Tuesday, August 13, with the shares rising by up to 6% on the bourses.
The jump in sugar stocks came after news agency PTI, citing sources, reported at around noon that the government is considering a proposal to increase ethanol prices for the season starting November 2024.
The Centre is also pushing for diversification of feedstocks, as it aims to achieve the 20% blending target by 2025-26, sources were reported as saying.
"The price revision is being considered on priority to incentivise production and meet our blending goals," a person privy to the development told PTI, requesting anonymity.
By the end of the trading session, the sugar stocks pared some of the gains.
Last week, Cooperation Minister Amit Shah called for a multi-dimensional approach to biofuel manufacturing and affirmed that India would achieve its 20 per cent ethanol blending target by 2025-26, ahead of the original 2030 deadline.
Ethanol prices, fixed by the government, have remained unchanged since the 2022-23 season (November-October). Currently, ethanol produced from cane juice is priced at ₹65.61 per litre, while rates for ethanol from B-Heavy and C-Heavy molasses stood at ₹60.73 and ₹56.28 per litre, respectively.
The government sees the ethanol blending program as a key to meeting its green energy commitments and improving the financial health of sugar mills, the sources added.
As per official data, ethanol blending in India has reached 13.3% by July of the current season, up from 12.6% during the 2022-23 season.
The country's total ethanol production capacity currently stands at 1,589 crore litres, oil marketing companies purchased 505 crore litres of ethanol for blending purposes during 2023-24 season.
Sources told PTI that the committee is specifically looking into the revision of prices of ethanol produced from sugarcane.
The sugar industry has demanded ethanol price hike, an increase in the minimum selling price of sugar, and permission for sugar exports. However, the government is prioritising ethanol production and blending targets, the report claimed.
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