Indian govt’s price correction of ethanol from maize may help balance distortion
Grain-based distilleries upset with Rs3/litre cut in purchase price, but sugar sector welcomes the decision
The Indian government's price cut for maize-based ethanol may aid in correcting market distortions, according to industry commentators. Grain-based distilleries express dissatisfaction with the Rs 3 per litre reduction, while the sugar industry supports the move but voices concerns over preferential treatment for dedicated ethanol plants.
Oil marketing companies have for the first time since launching the ethanol blending programme lowered the purchase price for maize ethanol, despite initially setting lower procurement prices during the 2022-23 Ethanol Supply Year. Rice sold by the Food Corporation of India has seen a Rs 1.82 per litre increase, while procurement rates for ethanol from C-Heavy Molasses and damaged foodgrains remain unchanged from 2025-26.
The government refrained from announcing prices for ethanol made from sugarcane juice and B-Heavy Molasses in the 2026-27 Ethanol Supply Year, as OMCs have decided not to purchase such ethanol if made from these feedstocks. Grain-based distilleries initially opposed the government's assured MSP for maize, as they were unwilling to pay the higher rate when market prices were lower.
The sugar industry, unlike maize producers, must pay at least the fair and remunerative price to sugarcane farmers. The Grain Ethanol Manufacturers Association has called for a balanced policy supporting viable maize and rice production, while the Indian Sugar & Bio-Energy Manufacturers Association warns that preferential allocation to dedicated ethanol plants could harm the sugar industry's financial health.
Written by urgent.news from Hindu BusinessLine's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
