India Halts Sugar Diversion For Ethanol In 2026-27, Invites Bids For 11 Billion Litres Amid Rising Prices
India has directed oil marketing companies to stop diverting sugar for ethanol production during the 2026-27 supply year, prioritising domestic sugar availability amid concerns over lower output and record-high prices. According to a tender issued on Friday, ethanol produced from sugarcane juice, sugar syrup and B-heavy molasses has been excluded from the latest procurement process, Business…
India has announced it will halt the diversion of sugar for ethanol production in the 2026-27 supply year, prioritizing domestic sugar availability as prices have reached record highs. This decision comes amid concerns about a potential drop in sugarcane output due to poor rainfall in key states such as Maharashtra and Karnataka.
In response, the government has invited bids for 11 billion litres of ethanol for the upcoming supply year, starting from November. The ethanol produced from corn, broken rice, and surplus rice procured via the Food Corporation of India (FCI) is eligible, but not that made from sugarcane juice, sugar, sugar syrup, or B-heavy molasses.
The Indian Oil Corporation, Bharat Petroleum Corporation, and Hindustan Petroleum Corporation jointly issued the tender for ethanol. The government's strategy involves shifting demand to grain-based ethanol while aiming to bolster sugar supply. Oil companies have also lowered the incentive for corn-based ethanol from ₹5.79 per litre to ₹2.79 per litre, reducing the procurement price from ₹71.86 per litre to ₹68.86 per litre.
India implemented a nationwide E20 petrol blending policy this year, mandating that petrol contain 20% ethanol to reduce dependence on imported oil and curb pollution. However, some motorists have raised concerns about the compatibility of ethanol-blended petrol with older vehicles.
Written by urgent.news from Free Press Journal's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
