India cuts ethanol output forecast amid high sugar prices

The International Sugar Organization (ISO) has lowered its forecast for India’s fuel ethanol production in 2026 by 0.75 billion liters to 11.3 billion liters. The revision reflects constraints on the use of sugar-based feedstocks for biofuel production rather than a shortage of processing capacity.

India is expected to divert only around 1 mln tons of sugar to ethanol production in the coming season, compared with 2.8 mln tons previously. The shift comes amid tighter supply conditions and high prices, with domestic wholesale sugar prices reaching their highest level since at least 2020 and prompting the government to allow imports.

Against this backdrop, grains, particularly corn, are becoming the main feedstock for India’s ethanol industry. According to ISO, grain-based feedstocks now account for most of the country’s ethanol requirements as the government seeks to meet its biofuel blending targets while maintaining sufficient sugar supplies for the food market.

Meanwhile, global fuel ethanol production is forecast to rise by 6% in 2026 to 130.1 billion liters, compared with consumption of around 127 billion liters. In contrast to India, Brazil’s ethanol production forecast was raised by 1.76 billion liters to 38.3 billion liters.

The shift comes as the global sugar balance tightens. ISO cut its estimate of the 2025/26 global sugar surplus to 1.1 mln tons from 2.2 mln tons and forecasts a small deficit of 0.2 mln tons in 2026/27. Under these conditions, further growth in India’s ethanol production could increasingly depend on corn and other grain-based feedstocks.

Tags: India, ethanol, fuel, corn, grain, prices, sugar