Centre weighs resuming rice supplies to ethanol makers

Move comes amid worries that the government may fail to reach its ethanol blending target

- Puja Das

The government is considering resuming rice supplies for ethanol production, worried that it might miss production targets amid a shut-down by ethanol distilleries, two government officials aware of the matter said.

The move comes in spite of criticism, sparked by the Karnataka assembly elections, over a mismatch in rice prices—it’s cheaper for making ethanol than for human consumption.

After the May elections, the Centre stopped supplying subsidized rice to state governments, putting these stocks for open market sales instead. But these found no takers after prices zoomed, prompting the Centre to order the Food Corporation of India to halt rice supplies for ethanol production last month.

This disruption in rice supply to distilleries for ethanol production has reportedly led to a temporary shutdown of a few units.

Ethanol is made from sugarcane but also from grains, mostly rice. While sugarcane juice and an intermediate product called ‘B-molasses’ account for about 80% of the ethanol produced in India, rice has a share of nearly 18%.