Centre may reduce reserve sale price for rice to make ethanol

GIVEN THE HIGH rice stocks, the government is discussing a reduction in the reserve sale prices of broken rice offered to grain-based distilleries for ethanol manufacturing from the central pool held by the Food Corporation of India (FCI).

- SANDIP DAS

Sources told FE that discussions are underway to assess the availability of feedstock—maize and rice—for biofuel production.

Officials acknowledged that the lack of takers for broken rice allocated to ethanol manufacturers stems from the high prices set by the government.

"We are discussing the issue with all stakeholders," said a source, adding that a price reduction is under consideration.

In August, the government lifted a 13-month ban on rice sales to ethanol distilleries, approving the purchase of 2.3 million tonne (MT) from central pool stocks for distilleries at ₹28/kg, excluding transportation costs.

The rice was to be sold via e-auction under the FCI's open market sale scheme (OMSS).

However, there were no takers, as ethanol manufacturers cited a lack of financial viability.