The minimum selling price of sugar has been ₹31 a kg since February 2019 while the current cost of production is estimated at ₹40.24/kg. The government must ensure that at least 50% of total ethanol sourcing comes from the sugar sector, increase the minimum selling price, announce the sugar export policy immediately, and raise the ethanol procurement prices.
| Photo Credit: RAJU V
The sugar sector has raised concerns over reduction of ethanol sourcing from the sugar sector during the 2025-2026 ethanol supply year.
The Indian Sugar & Bio-Energy Manufacturers Association (ISMA) said the only 289 crore litres of ethanol have been allocated from sugar-based feedstocks, accounting for just 28% of the total requirement. The industry has invested close to ₹40,000 crore and has the capacity to supply 650 crore litre of ethanol a year. It supplied nearly 330 crore litre in the last ethanol supply year, it said.
The sector expects almost 335 lakh tonne of sugar production between October 1, 2025 and September 30, 2026. Of this, domestic consumption will be just 284 lakh tonne. Sugar diversion for ethanol will be 34 lakh tonne and this will lead to excess sugar stocks.
While the Fair and Remunerative Price of sugarcane increased by 16.5% to ₹355 a quintal since 2022–23, ethanol procurement prices from sugarcane juice and B-heavy molasses have remained unchanged at ₹60.73 and ₹65.61 a litre, respectively. The cost of production of ethanol stands at ₹66.09 per litre from B-heavy molasses and ₹70.70 per litre from sugarcane juice.
The minimum selling price of sugar is ₹ 31 a kg since February 2019 while the current cost of production is estimated at ₹40.24/kg. The government should ensure at least 50% of total ethanol sourcing is from the sugar sector, increase the minimum selling price, announce immediately the sugar export policy, and increase the ethanol procurement prices.
In separate statements, the ISMA and the Grain Ethanol Manufacturers Association called for enhancing ethanol blending beyond E20 and fast tracking nation-wide adoption of flex fuel vehicles.
Published – October 29, 2025 08:19 pm IST
