Pakistan to expand ethanol output by 150kt/yr

15 November 2006 07:12  [Source: ICIS news]

SINGAPORE (ICSI news)--Pakistani ethanol producers are keen to expand their production to supply to the global markets given the absence of a local market for alcoholic beverages, they said on Wednesday.

Producers could tap on the country’s sugarcane production base and add another 150,000 tonnes/year of ethanol during 2007, they added.

Pakistan currently has 21 distilleries producing around 650,000 tonnes/year of ethanol. Of these, seven to eight distilleries also produce fuel grade ethanol or anhydrous ethanol which is increasingly being used for gasoline blending.

Pakistan sees ethanol as a product for the future, but ethanol producers must be integrated with sugar mills to be able to survive in this market, said Shayan Aslam Khan, international trade manager with Dewan Trade International Limited (DTIL).

The country produces high quality ethanol or extra neutral grade, used in pharmaceutical applications and is exported to Europe and some Asian countries, he added.

Ethanol prices during the third quarter this year were as high as $650/tonne FOB Pakistan, when supply was tight globally as demand increased after the US phased out methyl tertiary butyl ether (MTBE) in gasoline.

Price discussions for extra neutral grade ethanol fell to below $600/tonne FOB Pakistan in November as tight supply has eased, traders said.

By: Anu Agarwal
+65 6780 4359

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