India to Ban Procurement of Ethanol from Sugar and Certain Sugarcane Feedstocks from November

en.Wedoany.com Reported - On October 16, India's state-owned fuel retailers issued a joint ethanol procurement tender for the 2026–2027 supply year, planning to procure approximately 11 billion liters of ethanol, while excluding ethanol produced from sugarcane juice, sugar, syrup, and B-grade heavy molasses from the procurement scope in accordance with government directives. The new rules apply to the supply year from November 1, 2026 to October 31, 2027, with the relevant ethanol feedstock conversion volume set at zero.

The tender was issued by Bharat Petroleum Corporation Limited on behalf of state-owned oil marketing companies, with the procurement scale corresponding to India's policy requirement of blending 20% ethanol in gasoline. Feedstocks eligible for bidding include corn, broken rice, surplus rice supplied by the Food Corporation of India, and C-grade heavy molasses. The tender also reduced the procurement subsidy for corn-based ethanol from 5.79 rupees per liter to 2.79 rupees per liter, with the corresponding procurement price lowered from 71.86 rupees per liter to 68.86 rupees per liter.

India's major sugarcane-producing states of Maharashtra and Karnataka experienced insufficient rainfall earlier, affecting sugarcane yields. The Indian Sugar and Bio-energy Manufacturers Association estimates that sugar production for the 2026–2027 crushing season will be approximately 28 million tons, domestic consumption approximately 28.5 to 29 million tons, and opening stocks for the new season approximately 3.5 to 3.6 million tons. In the previous crushing season, approximately 3 million tons of sugar were diverted to ethanol production.

The Indian government has previously taken measures to regulate sugar supply, including imposing stock limits on dealers, restricting the inventory scale of bulk users, and allowing duty-free imports of 1 million tons of raw sugar. The new annual ethanol procurement tender excludes sugar and certain sugarcane feedstocks while continuing to accept bids for ethanol produced from grain feedstocks and C-grade heavy molasses.