News Capsule: Sugar Mills Reluctant to Divert Sugar for Ethanol; Industry Seeks Higher Ethanol Prices
17-Jun-2026 11:01 AM
News Capsule: Sugar Mills Reluctant to Divert Sugar for Ethanol; Industry Seeks Higher Ethanol Prices
★ The Indian Sugar and Bio-energy Manufacturers Association (ISMA) has said that sugar mills are becoming increasingly reluctant to divert sugar for ethanol production because prices for sugar-based ethanol are no longer attractive. ISMA has urged the government to increase ethanol prices derived from sugarcane juice, B-heavy molasses, and C-heavy molasses by at least ₹5 per litre.
★ Currently, ethanol produced from sugarcane juice is priced at ₹65.61 per litre, while maize-based ethanol receives ₹71.86 per litre. At the same time, domestic sugar prices are ruling at ₹38–40 per kg, making sugar sales more profitable than ethanol production for many mills.
★ According to ISMA, the developing El Niño poses a risk to sugarcane production, particularly in Maharashtra, where a large portion of sugarcane cultivation depends on rainfall. A weak monsoon could adversely affect both cane yields and next year's planting.
★ The industry has also reiterated its demand to raise the Minimum Selling Price (MSP) of sugar from ₹31 per kg to ₹38 per kg. Industry representatives argue that while the Fair and Remunerative Price (FRP) of sugarcane has increased from ₹275 per quintal in 2019-20 to ₹365 per quintal for 2026-27, the sugar MSP has remained unchanged for more than seven years.
★ ISMA believes the E20 ethanol blending programme has been successful and that the expansion of E85 fuel will gradually boost ethanol demand and production capacity. In Mumbai, E85 is currently priced at ₹82.12 per litre, making it about ₹20 per litre cheaper than E20 petrol, which could encourage greater adoption of flex-fuel vehicles in the future.