ARTICLE 4 #EthanolPolicy

For ESY 2025-26, the government has issued a tender for about 10.50 billion litres of ethanol supply. In that total, only 289 crore litres (2.89 billion litres) have been allocated to ethanol produced from sugar-based feedstocks (sugarcane juice, B-heavy molasses, etc) — about 28% of the requirement.

New Delhi, 1 November 2025 – The Indian sugar industry has expressed serious concerns over the government’s ethanol policy for the 2025‑26 supply year, warning that the shift towards grain-based feedstocks could threaten sugar mills’ operations and farmer incomes.

The SAP rise is intended to benefit sugarcane farmers in UP by giving them higher assured price for their produce. This can boost their incomes. The increased cost of raw material (cane) squeezes margins, especially when sugar selling prices and ethanol procurement rates are not rising equivalently.

Maize farmers across the country are facing one of the steepest price declines in recent years, raising alarms within the agricultural sector. According to farmer groups, the sudden crash in maize prices has left many producers unable to cover their basic production costs, pushing them toward financial distress.

Sugar prices saw a slight uptick on Monday as market sentiment strengthened amid reports that the Indian government may soon raise ethanol procurement prices. Traders noted that even a modest increase in ethanol prices could encourage sugar mills to divert more cane juice and molasses toward ethanol production, potentially tightening sugar supply in the market.

Karnataka Chief Minister has announced that a meeting will soon be held with distillery operators across the state to direct them to begin immediate procurement of maize for ethanol production.