India’s rice-based ethanol production was disrupted as the government suddenly stopped supply of the feedstock in late July.
Grain-based ethanol producers are hoping the government will soon resume selling surplus rice from its stocks at the Food Corporation of India (FCI) at subsidized rates.
India has around 100 grain-based distilleries that fully rely on feedstock supply from the government. Their production accounts for more than a fifth of total ethanol being procured by oil manufacturers for fuel blending.
Currently, distilleries producing ethanol from rice as well as dual-feed distilleries, which use sugarcane and grains have been affected by the sudden disruption, said a source at the All India Distillers’ Association (AIDA) an apex body representing domestic producers.
“We are facing a huge crisis and some producers may be forced to stop ethanol production. We are in talks with the government,” he added.
No official explanation was given but the stoppage of rice supply to ethanol producers came after India banned exports of the grain.
On 20 July, India banned the export of non-basmati white rice in a bid to contain rising domestic prices.
The south Asian nation is the world’s largest rice exporter, accounting for nearly 40% of the global trade of the grain.
The government is reviewing its policy of supplying surplus rice from FCI for ethanol production and may impose some restrictions, according to media reports.