India directed its state-owned fuel sellers to stop sourcing ethanol made from sugar, sugarcane juice, sugar syrup, and B-Heavy molasses starting with the supply year that begins Nov. 1. The shift follows dry summer weather and an El Niño that helped produce the weakest monsoon in more than ten years, leaving the world's No. 2 sugar producer with a smaller crop and a tighter market as global prices climbed.
A joint tender issued Friday cites the new government instructions and makes the ban explicit: "No offers have been sought for Ethanol produced from sugarcane juice, sugar, sugar syrup and B-Heavy molasses in this quantity bid tender."
Indian Oil Corp., Bharat Petroleum Corp., Hindustan Petroleum Corp., Numaligarh Refinery Ltd., and Mangalore Refinery and Petrochemicals Ltd. issued a combined tender seeking nearly 11 billion liters for the upcoming supply year, excluding the sugar-route sources listed above.
Supplies can still include ethanol made from C-heavy molasses, damaged food grains, corn, and surplus rice bought by the Food Corp. of India, along with other feedstocks that the National Policy on Biofuels allows.
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To cut dependence on imported oil and provide an additional income stream for farmers, India has relied on ethanol derived from sugarcane and grains. Prime Minister Narendra Modi's government advanced the deadline for reaching 20 percent ethanol blending in gasoline by five years, and the goal was achieved in 2025.
The bottom line: sugar-route ethanol is off the table for the new supply year, while C-heavy molasses, grain-based routes, surplus FCI rice, and other permitted feedstocks remain in play under the tender.
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