Stories
India Halts Sugar Diversion for Ethanol in 2026-27 Amid Record Prices
- •India directed oil marketing companies to cut sugar diversion for ethanol production to zero in the 2026-27 supply year.
- •The latest tender excludes ethanol made from sugarcane juice, sugar syrup, and B-heavy molasses.
- •The move aims to protect domestic sugar supplies and lower record-high prices driven by poor rainfall in key states.
- •Manufacturers are invited to bid for 11 billion litres of ethanol made from corn, broken rice, and surplus rice.
- •Oil marketing companies also reduced the incentive for corn-based ethanol from 5.79 rupees to 2.79 rupees per litre.
Key Questions Answered
India ordered zero sugar diversion for ethanol production in 2026-27 because poor rainfall threatened domestic sugar output and pushed prices to record highs. The move aims to protect domestic sugar supplies while balancing energy goals.
The latest tender allows manufacturers to bid for ethanol made from corn, broken rice, and surplus rice procured by the Food Corporation of India. Meanwhile, offers for ethanol produced from sugarcane juice, sugar syrup, and B-heavy molasses have been completely excluded.
The oil marketing companies cut the incentive for corn-based ethanol from 5.79 rupees per litre down to 2.79 rupees per litre. This reduction brought the overall procurement price down to 68.86 rupees per litre from the previous 71.86 rupees per litre.
