India ramping up ethanol production as sugar prices plummet

In India, domestic sugar prices fell below production cost last quarter making government-regulated prices for ethanol more attractive to producers.

Shree Renuka Sugars, India’s biggest sugar refiner, in a joint venture with state-run oil refiner, Hindustan Petroleum Corp, plans to invest $80 million to build a sugar and ethanol plant. Hindustan Petroleum also plans to produce ethanol at its own sugar mills.

Indian sugar millers have offered 1 billion liters of ethanol to state-run oil companies for the sugar season ending in September 2011 to blend into gasoline. Analysts predict a profit margin of $0.07 to $0.09 per liter from ethanol, helping to boost earnings.

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