India's Godavari Biorefineries to start grain-based distillery in June quarter

Mumbai: Indiaa's Godavari Biorefineries plans to commission a 200 kilolitres-per-day (KLPD) grain-based distillery in the June quarter, a move aimed at diversifying its feedstock and enabling the use of both sugarcane and corn depending on market prices.

"The new distillery ‌will ⁠be integrated ⁠with our existing distillery. It will be a fungible facility that can change feedstock," Samir Somaiya, managing director of the company told Reuters.

The company operates a sugar mill in northern Karnataka, a key corn-growing region, he said.


Indian ​sugar mills, long reliant on ⁠sugarcane for ‌ethanol, are shifting to grain-based distilleries to ​run ​year-round and reduce exposure to swings in ⁠cane output.

Mills must pay a state-advised price ​to cane growers, which squeezes margins in ​surplus years when abundant supply depresses sugar prices while fixed cane payments remain in place.

There is a need to raise the minimum selling price of sugar to reflect higher cane costs ‌and ensure mills can pay farmers the promised rates for their produce, said Somaiya.

Grain-based ​distilleries accounted ​for 69% ⁠of ethanol blended with petrol in the last marketing year, with sugarcane feedstock making up the remaining 31%, according ​to the All India Distillers' Association.

Corn prices are trading nearly a third below the government-set floor price due to a production surplus, making corn-based ethanol more profitable than sugarcane-based output, industry officials said.