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Govt Bars Oil Firms from Buying Sugarcane-Based Ethanol to Control Sugar Prices
Sentiment: NeutralHigh Priority
What Happened?
The Indian government has restricted the purchase of ethanol made from sugarcane to ensure adequate sugar supplies and control prices. This decision will take effect from November 1, 2026.
Key points
- The government aims to keep more sugarcane available for sugar production.
- Ethanol can still be produced from C-heavy molasses, damaged food grains, surplus rice, and maize.
- The restriction is a response to concerns about lower rainfall affecting sugarcane production.
- Government-owned oil companies plan to purchase around 11 billion liters of ethanol for the new supply year.
- Sugar mills can sell additional sugar produced in October 2026 during October and November.
Key insights
- The restriction may lead to increased sugar availability in the domestic market.
- Sugar mills will need to adapt by sourcing alternative raw materials for ethanol production.
- This policy balances the need for ethanol blending with the demand for sugar.
Why it matters
This decision could help stabilize sugar prices in India amid concerns about production shortages.
Entities
Indian Oil Corporation· CompanyBharat Petroleum· CompanyHindustan Petroleum· CompanyNumaligarh Refinery· CompanyMangalore Refinery and Petrochemicals· CompanyMaharashtra· StateKarnataka· StateFood Corporation of India· Organization
Source
India Today
