PUNE: With grain-based ethanol production surpassing sugar-based output for the first time, the sugar industry is feeling the heat and has urged the central government to revise ethanol procurement prices and provide support for technology upgrades.
At a recent meeting of the National Federation of Cooperative Sugar Factories (NFCSF) held in Pune, industry representatives expressed concern over the shift in ethanol production trends and its impact on the viability of sugar mills.
According to data discussed at the meeting, ethanol production from grain-based sources has reached 650 crore litres in 2024-25, while production from sugar-based sources stands at 250 crore litres. This marks a significant shift from 2017-18, when grain-based ethanol output was negligible and sugar remained the dominant feedstock.
“The sharp increase in grain-based ethanol production has created a challenge for sugar mills, which have invested heavily in ethanol infrastructure. We are urging the central government to revise procurement prices to ensure sugar mills remain competitive and viable,” said Harshvardhan Patil, president, NFCSF.
Patil noted that while the sugar industry has the capacity to divert up to 40 lakh metric tonnes of sugar for ethanol production this year, only 32 lakh metric tonnes were used. “Due to better domestic prices for sugar, mills have preferred to produce sugar rather than ethanol,” he said, adding that pricing decisions are increasingly being dictated by market economics rather than policy incentives.
{{/usCountry}}Patil noted that while the sugar industry has the capacity to divert up to 40 lakh metric tonnes of sugar for ethanol production this year, only 32 lakh metric tonnes were used. “Due to better domestic prices for sugar, mills have preferred to produce sugar rather than ethanol,” he said, adding that pricing decisions are increasingly being dictated by market economics rather than policy incentives.
{{/usCountry}}The federation has also sought central assistance to adopt flexible production technologies that allow sugar factories to switch between sugar and ethanol based on market demand. “Without technological upgrades, we won’t be able to respond quickly to changing market signals,” said Patil.
The concerns come at a time when India’s ethanol blending targets are being recalibrated to reduce dependency on fossil fuels. The government aims to achieve 20% ethanol blending in petrol by 2025. However, a growing reliance on grain-based ethanol has triggered concerns over food security and pricing of essential grains.