We focus on grains and food industry.
We focus on grains and food industry.
We focus on grains and food industry.
We focus on grains and food industry.
We focus on grains and food industry.
We focus on grains and food industry.
We focus on grains and food industry.
We focus on grains and food industry. current time
Ethanol Expansion Is Putting India’s Sugar Security Under Pressure
India’s sugar market is entering a difficult phase, with the government preparing to import sugar after nearly a decade. The move reflects a sharp change from the period when India restricted exports after meeting its fixed quotas for the European Union and the United States to ensure adequate domestic supplies. Sugar stocks available for household consumption are now estimated to be 20% lower than a year ago, while prices have climbed by nearly 40% in the past two months.
The timing adds to the concern. Raksha Bandhan, Ganesh Mahotsav and Janmashtami are approaching, followed by Navdurga celebrations, Dussehra and Diwali. These festivals traditionally generate heavy demand for sugar through sweets, food preparations and religious offerings. Any delay in imports could therefore translate into another round of price increases.
Lower sugar production has been linked partly to poor weather and reduced sugarcane output. At the same time, a growing proportion of cane is being directed towards ethanol. The government has maintained its commitment to E20 petrol, even as concerns grow over the availability and cost of food crops. Ethanol blending is also expanding despite its impact on vehicle mileage in some petrol vehicles.
India’s ethanol industry has expanded dramatically. Annual production capacity has already crossed 2,000 crore litres and is projected to increase by another 400 crore litres during the current financial year, taking total capacity close to 2,400 crore litres. In 2014, annual ethanol production stood at 421 crore litres. For the current financial year, E20 petrol alone is expected to require around 1,200 crore litres of ethanol, while industries, pharmaceutical companies and chemical manufacturers account for another 350 crore litres of demand. E20 petrol has been sold in India since 2025.
The growing use of food crops for ethanol and alcohol production is creating a serious conflict between energy needs and food security. Grains and other agricultural produce are essential for human survival, yet increasing demand for biofuels is diverting part of this supply towards fuel production. In India, allowing this trend to expand unchecked could worsen the risk of hunger and put additional pressure on food prices.
The concern becomes greater as vehicle production and fuel consumption continue to rise, supported by easier access to bank credit. This can indirectly encourage greater use of crops for energy rather than food. If the diversion of grains towards ethanol and alcohol continues, global food demand could rise by 70% by 2030, while grain prices could potentially double.
The issue calls for a rethink of ethanol policy. Renewable fuel has a role in reducing dependence on fossil fuels, but food security cannot be compromised in the process. Greater emphasis should be placed on non-food sources for biofuel so that India can pursue its energy goals without putting basic food availability at risk.
