India excludes sugar feedstocks from 11 billion litre ethanol tender
India’s state-run fuel companies sought bids for about 11 billion litres of ethanol while excluding sugarcane juice, sugar, syrup and B-heavy molasses from the new tender. Other eligible feedstocks include corn and specified rice supplies. The change comes amid concern over sugar output and high prices, as the country continues its mandatory ethanol-blending programme. Allocations also remain subject to pending litigation.
Economics & Markets··Midday
Fuel companies change the eligible feedstocks
India’s state-run fuel companies invited bids for about 11 billion litres of ethanol while excluding sugarcane juice, sugar, sugar syrup and B-heavy molasses from the new tender. Molasses is a thick byproduct of sugar manufacturing. The government directed that sugar diversion to ethanol fall to zero in the 2026/27 supply year, changing which producers can offer supplies under this procurement cycle.[1], [2]
Indian Oil, Bharat Petroleum and Hindustan Petroleum issued the joint call on October 16 for the supply year beginning in November. Corn, broken rice and surplus rice obtained through the Food Corporation of India, the state grain agency, remain eligible. The tender also lists C-heavy molasses, damaged food grains and other feedstocks allowed under the National Policy on Biofuels.[1], [2]
Sugar supply concerns precede the tender
India has long used surplus sugar to help meet ethanol-blending goals. This year the government made the E20 fuel blend mandatory nationwide as part of efforts to cut pollution and oil imports. At the same time, the world’s largest sugar consumer has sought to increase domestic sugar production and bring down high prices. Reduced rainfall in Maharashtra and Karnataka raised concern over the crop.[1]
In August, the government was considering limits on sugarcane use for ethanol in the sugar season starting in October. The tender followed that discussion. Companies also cut the incentive for corn ethanol from 5.79 to 2.79 rupees per litre, lowering its procurement price from 71.86 to 68.86 rupees per litre.[1]
Delivery allocations depend on pending litigation
Suppliers must state offered volumes in kilolitres by feedstock and quarter. The delivery period runs from November 1 to October 31, 2027, with four three-month quarters beginning in November, February, May and August. Bids remain valid until October 31, 2027. Allocated supplies are to be purchased at the prevailing ethanol rates declared for the supply year.[2]
Allocations are also conditional on ongoing litigation over the companies’ ethanol allocation methodology. The companies reserve the right to revise, reallocate, reduce or cancel quantities in response to judicial decisions. Bidders must acknowledge the condition and waive associated compensation claims. The 11 billion litre call is a request for offers, with delivery quantities still subject to those terms.[2]
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