Business · Energy & Commodities · 2 hrs ago
India caps rice and damaged grain use for ethanol production
For the 2026-27 supply year, India has capped ethanol made from surplus rice and damaged foodgrains.
The rules apply to supplies for oil marketing companies, which have tendered for 11 billion litres of ethanol to blend into fuel.
Together, the two grain sources can supply up to 4.84 billion litres, while the rice limit covers the first three quarters of the supply year.
The government has also stopped sugarcane juice, sugar, sugar syrup and B-heavy molasses from being used for ethanol in this period.
With those sources restricted, more demand is likely to shift to maize, which is also used by poultry, dairy and starch businesses.
That could increase competition for maize as supplies are already under pressure.
India has capped ethanol production from surplus Food Corporation of India rice at 3.24 billion litres over the first three quarters of the 2026-27 supply year.
It has also set a separate annual ceiling of 1.6 billion litres for ethanol made from damaged foodgrains.
Together, the two sources can supply at most 4.84 billion litres of the 11 billion-litre tender issued by oil marketing companies.
The limits leave more of the ethanol requirement to be met by other feedstocks, particularly maize.
The changes follow a decision to stop sugarcane juice, sugar, sugar syrup and B-heavy molasses from being used for ethanol in 2026-27.
- Who
- The Centre set the limits, and oil marketing companies will manage allocations.
- What
- It capped ethanol made from surplus FCI rice and damaged foodgrains.
- When
- The revised tender conditions were issued on November 3. The 2026-27 supply year runs from November 2026 to October 2027.
- Where
- India.
- Why
- Not stated
This story does not have two clearly opposing sides.
BPCL, on behalf of oil marketing companies, issued a procurement tender directing that sugar diversion for ethanol be reduced to zero.
The government issued revised tender conditions setting ceilings for ethanol made from surplus FCI rice and damaged foodgrains.
- FCI rice ceiling
- 3.24 billion litres over the first three quarters of 2026-27
- Damaged foodgrains ceiling
- 1.6 billion litres for the supply year
- Combined maximum
- 4.84 billion litres
- Oil marketing companies’ tender
- 11 billion litres
- Rice allocation
- 7.2 million tonnes, valid until June 30, 2027
What people are saying
DFG is used as food besides feed. This is the first sign of concern over food availability.
FCI rice is subject to two boundaries. Not over 30% of the total ethanol offered by a unit can be such ethanol, and the allocation is limited to 1.08 billion litres a quarter for three quarters.