Stories
India Faces Hurdles in 20 Percent Ethanol Blending Target Due to Falling Sugar Share and Tight Maize Supply
- •India faces significant challenges in achieving its 20% ethanol blending target for the upcoming season due to a sharp decline in sugar-based production and tight maize availability.
- •According to AISTA Chairman Praful Vithalani, the share of sugar in ethanol supply has dropped drastically to around 2% after the government restricted procurement from sugar syrup and B-heavy molasses.
- •The government has floated a tender for 1,100 crore litres of ethanol for the 2026-27 supply year, with expectations of sourcing 325 crore litres from rice and up to 100 crore litres from damaged grains.
- •Maize is expected to bridge the massive gap, but producing the required 675 crore litres would demand about 18 million tonnes of maize amid a 20 to 25 percent surge in prices.
- •Despite output concerns, domestic sugar prices are projected to remain stable in the near term due to effective government supply management and quota releases ahead of the festive season.
Key Questions Answered
India's 20% ethanol blending target faces challenges due to a sharp decline in sugar-based ethanol production and tight maize supplies, according to Praful Vithalani of AISTA. The government has avoided procurement from sugar syrup and B-heavy molasses, dropping sugar's share to around 2%, while bridging the gap with maize remains difficult due to rising prices and high volume requirements.
For the 1,100 crore litre ethanol tender for the 2026-27 supply year, sugar is expected to contribute only about 2% of the total supplies. Vithalani estimates that approximately 325 crore litres could come from rice, up to 100 crore litres from damaged grains, while maize is expected to bridge the remainder of the requirement.
Despite concerns over sugar production dropping to around 27 million tonne due to El Niño-linked weather uncertainties, sugar prices are expected to remain stable in the near term. The government has managed supplies through quota releases, ensuring adequate stocks to meet festive demand and keeping prices steady while mills begin crushing by early November.
