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- By Parinda News Bureau, June 24, 2006, 11:15 IST
The Mukesh Ambani run Reliance Industries' ethanol production plans in Maharashtra may hurt the interests of Maharashtra strongman Sharad Pawar. Reliance is expected to procure the bulk of sugar from Maharahstra's farmers by offering them a price much higher than the price offered by Sharad Pawar controlled Suagr cooperatives.
Pawar who is union agriculture minister and the Sugar Baron of Maharashtra has called for a meeting on Wednesday in which major sugar cooperatives and Reliance officials will participate to discuss Reliance's plans for the sugar and ethanol industry.
Reliance, sources say, plans to produce ethanol, which is derived from molasses, a by product of sugar production. Ethanol is an additive for petrol. The government plans to make it compulsory for all oil companies to blend 5 % ethanol with petrol from october 2006. This may be doubled to 10 % a year later.
Reliance may offer as much as Rs.1600 per quintal which is significantly higher than the Rs.1300 per quintal being offered by the Sugar cooperatives now. Sharad Pawar's hold in local politics is said to be largely due to this control over the sugar industry in Maharashtra. Reliance's expansion plans may affect his interests in the sugar industry and eventually in politics.
Meanwhile sources said alcohol prices may rise as the cost of production increases with the rise in price of molasses.
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