Godavari Biorefineries in India to launch grain-based distillery by June quarter

Godavari Biorefineries in India plans to commission a grain-based distillery capable of producing '200 kilolitres per day (KLPD) by the end of the June quarter. This move is intended to diversify a company's feedstock, and allow it to use both sugarcane and corn - depending on the market price.

The new distillery is integrated into our existing distillery. Samir Somaiya?, the managing director of the company said that it will be a fungible plant which can change feedstock.

He said that the company has a sugar mill in northern Karnataka. This is a major corn-growing area.

Indian sugar mills have long relied on sugarcane to produce ethanol. They are now switching to grain-based distilleries to run all year round and to reduce their exposure to fluctuations in cane production.

Mills must pay cane farmers a price set by the state. This squeezes their margins during years of surplus when sugar prices are low due to an abundance of supply.

According to?Somaiya, it is necessary to increase the'minimum selling price' of sugar in order to reflect rising cane prices and to ensure that mills are able to pay farmers what they promised for their produce.

According to the All India Distillers' Association, grain-based distilleries produced 69% of the ethanol that was blended with gasoline in the most recent?marketing year. Sugarcane made up the remaining 31%.

Due to a surplus of corn, the price is trading nearly a third below the floor price set by government. This makes corn-based ethanol cheaper than sugarcane based ethanol, according to industry officials.

(source: Reuters)