India looks to import ethanol on supply crunch

21 May 2008 09:16  [Source: ICIS news]

SINGAPORE (ICIS news)--Indian buyers are looking to import industrial ethanol amid reduced domestic output and low inventories, after nearly two years of minimal imports, said ethanol buyers and sellers on Wednesday.

India may be short of hydrous ethanol for industrial purpose this year and could source the product from the international market, said an Indian ethanol producer.

"There has been an increase in ethanol blending in gasoline this year. Additionally, sugar production is also expected to dip from 28.5 m tonnes in 2007 to around 26-27 m tonnes in 2008," he added.

India may require 100,000-150,000 tonnes of ethanol this year for the industrial production of acetic acid and ethyl acetate, said an ethanol buyer adding that the end products would have to be imported into the country if ethanol could not be procured.

Domestic buying ideas for ethanol had been close to $600/tonne CFR (cost and freight) west coast India, said a regional trader.

However, unseasonal rains in Brazil, the world’s biggest ethanol exporter and surging gasoline prices had strengthened ethanol prices globally and low supply outside of Brazil had raised the prices for July and August to $650-680/tonne CFR Asia, he added.

India is the second largest producer of sugar in the world after Brazil and is also a big producer of ethanol from molasses, a by-product of sugar production.

In recent years, India’s imports of ethanol have not been very high while domestic consumption has risen due to the government’s gasoline-blending programme introduced in 2007.

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By: Anu Agarwal
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