Sugar Diversion for Ethanol Production May Decline

17-Jun-2026 01:38 PM

Mumbai: The Director General of the Indian Sugar & Bio-energy Manufacturers Association (ISMA) states that Indian millers are losing interest in diverting sugar for ethanol production because the sales realization is not sufficiently profitable.

The government is hesitant to raise the price of ethanol produced from sugarcane-based feedstocks. Although the ex-factory minimum selling price of sugar has not seen an increase since February 2019, it remains at a relatively reasonable level.

The production and marketing of ethanol derived from sugarcane feedstocks—such as cane juice, sugar syrup, B-heavy molasses, and C-heavy molasses—are gradually becoming unattractive for sugar mills. The price of sugarcane-based ethanol has now fallen below that of maize-based ethanol.

An increase of at least ₹5 per liter in the price of ethanol made from sugarcane feedstocks is essential for millers to show interest in ramping up production. Furthermore, there must be adequate stocks of these feedstocks available, and no restrictions should be imposed on their usage.

Sugarcane yields are expected to be impacted by El Niño this season, likely leading to a drop in sugar production and firm prices. Under these circumstances, millers may prioritize sugar production over ethanol production.