New Delhi: India is likely to increase its reliance on rice for ethanol production this year as lower kharif acreage under maize and sugarcane raises concerns over the availability of key feedstocks. Senior sugar industry executives expect rice’s contribution to ethanol production to rise by around 15-20% during the current season. Rice currently accounts for nearly 26.79% of ethanol feedstock in India, while sugarcane contributes around 28%.
The expected shift comes as maize planting has declined by about 4%, while sugarcane acreage is down 0.85%, according to the latest government data. Lower sugarcane availability could become a bigger concern as sugar prices have surged to record levels amid fears of weaker output in the next crop season. Poor and delayed rainfall in major sugar-producing states such as Maharashtra and Karnataka has increased concerns over sugarcane production and future ethanol availability from the sugar sector.
With sugar prices remaining elevated, the government is expected to encourage sugar mills to limit ethanol production from sugarcane juice and B-heavy molasses and increase the use of grain-based feedstocks. This could further boost demand for rice and maize as India continues its push to achieve a 20% ethanol blending target in petrol.
India’s rice stocks, however, provide some cushion against potential feedstock shortages. Government-held rice stocks, including unmilled paddy, stood at a record 68.43 million tonnes as of June 1, significantly higher than the buffer requirement of 13.5 million tonnes for July 1. The strong stock position could allow the government to divert more rice towards ethanol production without immediately creating a major supply shortage.
The food ministry has already earmarked 72 lakh tonnes of rice from government stocks for distilleries for the next ethanol supply year, compared with 52 lakh tonnes allocated for 2025-26. In addition, 55 lakh tonnes of 100% broken rice has been made available through e-auctions for ethanol manufacturers.
The greater use of rice for ethanol could help India maintain adequate supplies as it targets 20% ethanol blending in petrol and considers the possibility of increasing the blending rate beyond the current target. However, lower rainfall and the risk of weaker crop yields could put pressure on food supplies and prices in the coming months. The government is also taking steps to control domestic sugar prices by restricting sugar exports and imposing stockholding limits on traders.
As India balances its ethanol blending ambitions with food security concerns, rice is emerging as an increasingly important alternative feedstock. The availability of substantial government rice stocks may provide a temporary safety net, but any significant decline in agricultural output could intensify concerns over food prices and grain availability.
