The government has introduced relaxations in certain provisions related to the reserve price of rice under the Open Market Sale Scheme (Domestic) (OMSS (D)) policy for the year 2024-25, offering relief to grain-based ethanol producers. These changes apply to the sale of rice stocks that exceed buffer stocking norms and will remain in effect until March 31, 2025, or until further notice, whichever comes first.
The revised reserve price for the sale of rice to ethanol distilleries for ethanol production has been set at Rs 2,800 per quintal, applicable across India.
According to the letter issued on January 7 to FCI Chairman and Managing Director, it mentions that the supply of FCI rice can be affected by ethanol distilleries in both deficit and surplus states all through the year. Further, with regard to FCI rice supplied for ethanol production, inter-alia the following modalities shall be adopted: (a) Sale of FCI rice for ethanol production will only be allowed to distilleries registered with OMCs as suppliers of ethanol. (b) Distilleries along with a copy of signed contract with OMCs regarding supply of ethanol may approach the FCI depot of their choice. (c) FCI will allocate the rice as per the quantity of ethanol allocated to distilleries in their contract with OMCs. (d) Distilleries to provide a copy of certificate issued by OMCS regarding supply of ethanol. (e) The OMCs would be furnishing details of quantity of ethanol produced from FCI rice, received at respective depot every month.
In August 2024, the government lifted a ban on rice sales imposed in 2023 on ethanol distilleries by allowing the purchase of 23 lakh tonnes (during Aug-Oct 2024) from the central pool grain stocks. The rice was to be sold through e-auction under the OMSS of the FCI. However, there were no takers for rice under the OMSS from ethanol manufacturers, citing a lack of financial viability.
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