Lucknow: Uttar Pradesh is expected to increase its ethanol production by over 12% in the upcoming ethanol supply year (starting November 2025), thanks to the central government’s policy allowing ethanol to be made from sugarcane juice, syrup, and molasses.
This move not only helps reduce India’s dependence on oil imports but also supports the country’s ethanol blending programme aimed at improving energy security.
Currently, UP produces around 160 crore litres of ethanol across 90 distilleries. This is projected to rise to 180 crore litres, helping the state retain its position as India’s top ethanol producer. However, in terms of total capacity, UP’s 224 crore litre capacity still trails behind Maharashtra, which leads with 305 crore litres.
Ethanol prices range between ₹57.97 per litre (when made from C-heavy molasses) to ₹71.86 per litre (from maize).
Industry experts say that increasing ethanol production will help manage surplus sugar stocks and stabilise sugar prices. Since more sugarcane juice and molasses will be diverted to ethanol, sugar production will reduce slightly, which is expected to push up sugar prices by about ₹1 per kg—from ₹37-41 to ₹38-42 per kg.
Higher sugar prices will improve the financial health of sugar mills, enabling them to pay farmers on time and reduce dues. A senior official said this could bring more stability to UP’s sugar sector, which is both politically and economically significant for the state.
Despite 25% of molasses being reserved for making country liquor (a key revenue source for the state), UP’s ethanol output remains strong.
Meanwhile, sugarcane cultivation has expanded in the state—from 23 lakh hectares in 2022-23 to 29.5 lakh hectares in 2024-25. Average yield per hectare has also gone up from 79 to 83.25 tonnes.
However, the actual sugarcane crushed by mills dropped from 1,111 lakh tonnes in 2022-23 to 956 lakh tonnes in 2024-25. Sugar output also declined from 120.5 lakh tonnes to just over 92 lakh tonnes, due to more cane being used for khandsari (unrefined sugar), lower sugar recovery rates, and bad weather.
