India has ordered state-owned fuel retailers to stop procuring ethanol made from sugar and sugarcane-based feedstocks, effective Nov. 1, to stabilize domestic sugar prices. The move follows a significant drop in sugarcane production caused by a powerful El Niño and the weakest monsoon in over a decade, which has led to a global spike in sugar prices. State-owned refiners Indian Oil Corp., Bharat Petroleum Corp., Hindustan Petroleum Corp., Numaligarh Refinery Ltd., and Mangalore Refinery and Petrochemicals Ltd. issued a joint tender seeking 11 billion liters of ethanol, but explicitly excluded offers from sugar, sugarcane juice, sugar syrup, and B-Heavy molasses.
India, the world’s second-largest sugar producer, is facing a smaller crop than the previous year. The government is prioritizing food security and price stability over ethanol blending, even as it had previously accelerated its target of 20% ethanol blending in gasoline, achieved in 2025. Suppliers may still offer ethanol from C-heavy molasses, damaged food grains, surplus rice, corn, and other permitted feedstocks under the National Policy on Biofuels.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing