The Crossbill News Desk
India may have to impose stricter limits on sugar exports if it plans to expand ethanol blending in petrol beyond the current E20 level, according to a report by BMI, a unit of Fitch Solutions, on the global outlook for sugar prices, reported The Hindu BusinessLine.
The assessment comes amid increasing discussion within the ethanol industry on raising blending targets to support the country’s biofuel ambitions.
The report noted that India has already achieved the E20 blending target but further expansion would have implications for sugar availability and international markets.
“India, having achieved E20, appears increasingly likely to pursue a further expansion of its ethanol mandate. While India has capacity for further ethanol expansion, realising it will require the country to further restrict sugar exports, weighing on global supply and underpinning prices at the margin,” says the report.
Industry stakeholders have been advocating ethanol blending levels higher than 20%, arguing that enhanced diversion of sugarcane towards ethanol production could strengthen energy security. Analysts suggest that curbs on sugar exports may also help stabilise domestic prices at a time when global sugar rates are expected to rise during the April–June quarter.
Responding to questions on Monday (April 6) regarding any proposal to raise ethanol blending beyond E20, Petroleum Ministry Joint Secretary Sujata Sharma said, “As of now it stands at 20 per cent.”
India had earlier restricted sugar exports during the 2022-23 season following supply concerns, and even after a bumper output in 2023-24, shipments were not allowed.
The report, citing industry sources, said the government remains worried about mounting sugarcane payment arrears to farmers.
“Though 84% of Rs 1.07 lakh crore of dues has been cleared by mills, the arrear in terms of the absolute number is still a concern, when there is scope for getting more ethanol from sugar factories,” said an industry official, reported BusinessLine.
The developments indicate that future decisions on ethanol blending policy could be closely tied to domestic sugar availability, farmer payments and the broader balance between energy transition goals and agricultural market stability.
The assessment comes amid increasing discussion within the ethanol industry on raising blending targets to support the country’s biofuel ambitions.
The report noted that India has already achieved the E20 blending target but further expansion would have implications for sugar availability and international markets.
“India, having achieved E20, appears increasingly likely to pursue a further expansion of its ethanol mandate. While India has capacity for further ethanol expansion, realising it will require the country to further restrict sugar exports, weighing on global supply and underpinning prices at the margin,” says the report.
Industry stakeholders have been advocating ethanol blending levels higher than 20%, arguing that enhanced diversion of sugarcane towards ethanol production could strengthen energy security. Analysts suggest that curbs on sugar exports may also help stabilise domestic prices at a time when global sugar rates are expected to rise during the April–June quarter.
Responding to questions on Monday (April 6) regarding any proposal to raise ethanol blending beyond E20, Petroleum Ministry Joint Secretary Sujata Sharma said, “As of now it stands at 20 per cent.”
India had earlier restricted sugar exports during the 2022-23 season following supply concerns, and even after a bumper output in 2023-24, shipments were not allowed.
The report, citing industry sources, said the government remains worried about mounting sugarcane payment arrears to farmers.
“Though 84% of Rs 1.07 lakh crore of dues has been cleared by mills, the arrear in terms of the absolute number is still a concern, when there is scope for getting more ethanol from sugar factories,” said an industry official, reported BusinessLine.
The developments indicate that future decisions on ethanol blending policy could be closely tied to domestic sugar availability, farmer payments and the broader balance between energy transition goals and agricultural market stability.
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