Sugar co-operatives from Gujarat are likely to bid for about 17.5 million litres of ethanol to supply to public sector oil marketing companies (OMCs) during the new sugar year that starts from October 2011. The OMCs have floated tenders to purchase over 1 billion litres of ethanol form sugar industry for blending.

Nine sugar co-operative societies and three private distilleries from Gujarat are likely to submit the tenders for ethanol to the tune of 17.5 million litres, informed an industry source. The tenders will close on September 2.

"We will submit the tenders soon for the supply of ethanol to the oil companies. The co-operative societies and private distilleries would supply almost the same quantity of ethanol this year as was supplied last year. But we expect to get better price this year," informed Mansinh Patel, chairman, Gujarat State Co-operative Sugar Factories.

Currently, ethanol is sold at a price of Rs 27 per litre in the spot market in Gujarat. However, the industry is hopeful to get better price from the OMCs this year.

The distilleries in Gujarat have a combined manufacturing capacity of 250,000 litres per day (LPD) of which about 30 per cent is likely to be supplied to the OMCs for blending.

"Since no new distillery capacity has been added over the past one year, we expect to supply about 17.5 million litres of ethanol to the petroleum companies this year," said an industry player.

Indian Oil Corporation (IOC) has floated a tender to purchase 455 million litres of ethanol, while Bharat Petroleum Corporation (BPCL) and Hindustan Petroleum Corporation (HPCL) has called for the purchase of 283 and 277 million litres respectively.

Production of ethanol is expected to start from November and would continue till April next year with about 150 working days. Good monsoon this year has improved the crop outlook for the sugar cooperative societies in Gujarat.

"We have received good rains in the cane growing regions and the sowing has also been robust. We expect 12 million tonnes of sugarcane production in the next season, which would give 1.2 million tonnes of sugar with 10 per cent recovery," said Dilip Bhatka, chairman of Madhi Sugar Cooperative Society.

source: business-standard


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