Steep rise in FG hexane price hits solvent extraction plants

Over 400 solvent extractions plants in the country have been hit hard by rising prices of Food Grade Hexane – a basic raw material.

These units are using FG hexane to process oilseeds and oil-bearing materials to recover edible oil oils.

The major three petroleum companies – BPCL, HPCL and IOCL have increased their prices by 25% at Rs 44,500 per kilo litre (effective from June 3) over the last four months.

FG hexane is mainly supplied by these companies to the industry. Petroleum companies raised their prices by nearly Rs 10,000 per kilo litre over four months thanks to a steady increase in crude oil prices by 38% in the past few months.

“With the rising prices of crude oil globally, three major petroleum companies have increased their FG hexane prices by nearly Rs 10,000 per kilo litre in the past three-four months,” BV Mehta, executive director, Solvent Extractors’ Association of India (SEAI) told FE.

Processing cost of solvent plants has gone up by Rs 50 per tonne in the past one month.

“The high price of FG hexane will discourage the processing of oilcakes and will affect the production of edible oils, which is already in short supply and prices are sky rocketing,” he said.

The industry consumes about 1.20 lakh kilo litre of FG hexane per annum.

The increase in FG hexane should be in line with the recent rise in petrol and diesel prices, so that the industry can absorb it, sources said.