Petroleum Min Statement Re-affirms Govt's Commitment To Achieve 20% Ethanol Blending By 2025

You have with us Manisha in the studio. Manisha, all things commodities, all things sugar, by the way. I mean, the way the sugar prices have been in the international markets and way the sugar stocks have been surging, it does tell you that perhaps some policy and reform is in the markets, is in the works. And that's exactly or something that the Street is actually anticipating. We are then joined by Atul Chaturvedis, executive chairman, Sri Anuka Sugars. Miss Chaturvedi, Hi, thank you so much for joining us. First of all, on MSP because that is what the Street believes can be the first reform that we can see from the government. The expectations are quite on the higher side. What are you hearing and what is your sense? Because in the last four years, we've seen FRP being continued to be hiked, but not the MSP. No, in fact, the industry has been asking for a revision of MSP or minimum selling price essentially to make this as kind of an institutional rather institutionalized the whole process because FRP keeps getting increased and the minimum selling price doesn't move. So once these and if this is increased, then to send the right signal and it will also give the signal to the farmer, their money is going to be assured in future as the industry is not going to lose money. So I think this message hopefully the government will probably revise this. So we are quite Mr. Chaturvedi, what is what is your sense on what is the industry asking for? Because the current minimum selling price is ₹31.00 a KG. In fact, if you really the industry is been looking at something like ₹4041.00 as the price. So we just have to see whether and this is all ex factory, whether this happens or it doesn't happen, we still have watchful, but I think some action is definitely looking to be on the cards. All right, Mr. Trivedi, one, of course is the sugar minimum selling price. The other is very bullish statements coming in from the Ministry of Petroleum and Gas where they have talked about the blending on track 15% already done in the month of May and on track for 20% blending. That sends a very bullish signal for overall sugar as a sector. How, what are your numbers and do you do you, would you also say that 20% is on cards now by by the end of next year? In fact, this announcement by the honorable Petroleum Minister has actually come as a whip of fresh air. In fact in December when the cane juice ethanol and B heavy ethanol was banned for making ethanol. So we were all very disappointed and the headwinds were pretty high because sugar production was going up and was adding on to our interest burden. But now this statement reaffirms that the government has not put the plan on the backburner and the government is committed to ensure that the Prime Ministers target of achieving 20% blending by 2025 gets achieved. And I'm sure the kind of trust which the new minister is giving and the kind of signals the new minister is giving, definitely August. Well, not only for the sugar sector but for maize as well. And if we look at the numbers this year, this year they were expecting 825 crore liters to get 15% blending. As of 31st of May, almost something like 327 crore liters has been supplied. And the big change is that grain ethanol is now competing strongly with sugar and its a kind of 5050 ratio. So I think all this is good signals and it should be helpful to the sugar industry to cut down on their interest burden. So while both of these things are quite bullish and in works perhaps and that's exactly where the sugar stocks seem to be reacting with. Do you think that this would be a part of the 1st 100 days, the sugar minimum support price and of course our long term pricing policy for ethanol. So what is more important and at this point of time is that the industry has been asking the government to increase the price of ethanol which was supplied to the to the OM CS till now that needs correction and as the FRP for the new season has already been announced increase in FRP. So it is imperative that this is also done for next season. So what the industry is anticipating is that the price of cane juice ethanol should be more or less in tune with what the government is giving for maize based ethanol, which is about closer to about ₹72, which means an increase of about ₹7.00 from the current price. And similarly the be heavy ethanol price also needs to be jacked up in the same proportion, which would mean that it will now become something like ₹6566 or thereabouts. That's the industries requirements and demand. Let us see how things pan out as we go forward. And I'm sure some action is likely to be taken. Yeah, let me spell decent news for the space. And we're seeing decent action in all of these sugar stocks as well. Thanks a lot, Mr. Chaturvedi, for joining in and Manisha for taking us through that conversation. We will wrap up on this note from Halftime Report, but stay tuned because Business lunch will take all the market action ahead.