India: Maharashtra sugar millers seek long-term pacts with OMCs for ethanol

Sugar millers in Maharashtra have sought the intervention of the Niti Aayog to ensure long term purchase agreements with Oil Marketing Companies (OMCs) on the lines of power purchase agreements with the cogeneration units set up by sugar factories.

Sanjay Khatal, MD, Maharashtra State Cooperative Sugar Factories Federation (MSCSFF), pointed out that since sugar mills would be making huge capital investments for the production of ethanol in view of the interest subvention subsidy, their interests have to be protected in case the prices of crude reduce. In the Cogeneration sector, sugar mills sign long term agreements for 13 years. “We are looking at long-term purchase agreements on the same lines for a period of 10-15 years at assured rates with a clause for price escalation when prices of cane become high,” he said.