India Stops Sugar-Based Ethanol Diversion for 2026/27
India has directed oil marketing companies to reduce sugar diversion for ethanol production to zero for the 2026/27 supply year, beginning in November. The latest tender excludes ethanol produced from sugarcane juice, sugar syrup and B-heavy molasses, as the government prioritises domestic sugar availability amid concerns over falling production.
The oil marketing companies have invited bids for 11 billion litres of ethanol, allowing supplies made from corn, broken rice and surplus rice procured by the Food Corporation of India. The move aims to support sugar supplies and ease record-high domestic prices following poor rainfall in key sugar-producing states, including Maharashtra and Karnataka.
Meanwhile, the government has reduced the incentive for corn-based ethanol by ₹3 per litre, bringing its procurement price down to ₹68.86 per litre. India continues to promote E20 petrol, containing 20% ethanol, to reduce oil imports and pollution, while balancing the need for sufficient domestic sugar supplies.
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