GEMA asks Government to review prices of DFG; allow FCI rice for ethanol production

The Grain Ethanol Manufacturers Association (GEMA), a representative body of grain-based ethanol distilleries in the country has written a letter to the Petroleum Ministry dated 11th December, addressing it directly to the Hon’ble Minister himself.

The letter has detailed the distressing situation the grain-based distilleries are facing in accessing raw materials/feedstocks to produce ethanol for supplies in the current ESY. The Government in July this year banned grain-based distillery units from producing ethanol from FCI rice given supply constraints. Ever since then, grain-based distillery units have been facing raw material constraints. The Government has encouraged them to produce ethanol from maize, however, there are several production related constraints.

In the letter, GEMA mentions that the Government has inserted NAFED and NCCF in the supply chain management to procure maize through them, but the quantity mentioned is as low as 1 LMT. This is not sufficient enough to cater to the present need of grain-based ethanol distilleries to meet supply targets in the current ESY. The Association feels that the agencies should have been given a target of 10 to 15 LMT each and, to procure and distribute maize across India, as distilleries are spread out across the length and breadth of the country.

Moreover, the procurement price of maize offered by the agencies is Rs.22.50/kg (ex godown at MP and Rajasthan) against the MSP of Rs.20.90 /kg. The Association feels that the price offered doesn’t cover additional costs, which should be compensated by the OMCs to overcome the additional costs to ensure fair pricing for grain-based ethanol to sustain continuous supplies.

The third demand that the Association puts forth to the Government is to review the prices of Damaged Food Grains (DFG), and align it with current market prices of DFG as supplies have improved. They are requesting the Government to bring down the prices of DFG which is currently prevailing between Rs.27 to Rs. 28/kg.

Given reports that FCI is overloaded with surplus rice stocks of 100 MMT. The Association has requested the Government to allow 20 to 30% rice to be released immediately for ethanol production to stabilize ethanol supplies in the current year to OMCs.

The Association has requested a meeting with the Hon’ble Minister of Petroleum and Natural Gas, to personally represent the demand of the grain-based distilleries.


Please enter your comment!
Please enter your name here