Currently, the oil marketing companies buy ethanol from sugar- and grain-based distilleries at various rates for different feedstock used to produce the biofuel, as fixed by the government
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MOORTHY RV
The Indian government has allowed sugar mills to decide the feedstock to be used for the production of ethanol during the Ethanol Supply Year 2025-26 (November-October). The decision is likely to help sugar mills reduce sugar production, amid projection of a bumper output, by using sugarcane juice for ethanol.
In a letter to all sugar mills on Monday, the Food Ministry said factories and distilleries are “allowed to produce ethanol from sugarcane juice/sugar syrup, B-Heavy Molasses as well as C-Heavy Molasses during ESY 2025-26 without any restriction.”
The Department of Food and Public Distribution (DFPD), in coordination with the Ministry of Petroleum and Natural Gas (MoPNG), shall periodically review the diversion of sugar (sucrose) to ethanol production vis-a-vis production of sugar in the country so that availability of the sweetener for domestic consumption is ensured throughout the year.
Hike in rice price
Currently, the oil marketing companies buy ethanol from sugar- and grain-based distilleries at various rates for different feedstock used to produce the biofuel, as fixed by the government. Accordingly, they are paying ₹65.61/ltr for sugarcane juice/syrup, ₹60.73/ltr for B-Heavy Molasses, ₹57.97/ltr for C-Heavy Molasses, ₹64 for damaged food grain (broken rice), ₹71.86/ltr for maize and ₹58.50/ltr for subsidised rice supplied by FCI.
The rice sold by the Food Corporation of India (FCI) will be increased from current ₹22.50/kg to ₹23.20/kg from November 1.
“As there will be no sugar produced when ethanol is made out of juice/syrup, it is beneficial for the country not to have excess sugar production amid a bumper output projected. On the other hand, both B-Heavy Molasses and C-Heavy Molasses are produced as byproduct only when sugar is produced,” an industry official explained.
Indian Sugar and Bio-energy Manufacturers Association (ISMA) in July released its first estimate, projecting gross sugar production in India to rise 18 per cent to 34.90 million tonnes (mt) during 2025-26 season (October-September). It had urged the government to permit export of 2 mt and allocate another 5 mt for diversion towards ethanol.
As the sugar industry has capacity to produce 853 crore litre per annum, including 174 crore litre dual feed plant, if 100 per cent juice is used to produce full capacity, the mills need to divert 11 mt of sugar.
Published on September 1, 2025