Govt. banned ethanol from sugarcane to keep the price of sugar under check – then sugar industry went into problem with farmers not getting paid.
Govt banned sale of broken rice by FCI for ethanol production to keep the price of rice under check – then the grain based ethanol industry went into problem with many of them in losses. To save them Govt. increased price of ethanol from maize (much higher than petrol prices – which consumers are paying for) then price of maize shot up which did not help the ethanol producers… further it led to problems for animal feed industry (and consumers are paying for high prices)… Farmers didnt benefit much but middlemen made money as at time of harvest maize prices were low.
Now they have allowed ethanol from sugarcane when there is no molasses and cane harvesting season is yet to start… so no impact on ethanol supply – no payment to farmers, no benefit to sugar mills… at current FRP rates of sugarcane ethanol is only marginally profitable for sugar mills. Dont see how farmers will get paid on time – in some cases even paid at all !! They may increase ethanol price and force OMCs to blend at higher prices (as crude oil is falling) and then fuel inflation will not come down impacting the whole economy !!!
All in the name of keeping sugar prices down… and everybody is paying for it !!! Is the Govt even thinking before making decisions??
Investments decisions should be made on facts and not hope – so i think sugar and ethanol companies are very unattractive right now…
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