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Informist, Tuesday, Jun. 16, 2026

 

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--ISMA's Ballani: Need to increase price of ethanol from sugar by INR 5/ltr
--ISMA's Ballani: Mills reluctant to divert sugar for ethanol as prices low
--CONTEXT: ISMA Director General Deepak Ballani in interview with Informist
--ISMA's Ballani: Sugar prices seen elevated on El Nio concerns
--ISMA's Ballani: E20 fuel compatible with most vehicles
--ISMA's Ballani: Need to raise minimum selling price to INR 38/kg
--ISMA's Ballani: Use of better sugarcane varieties to improve yield
 

 

By Taniva Singha Roy

 

MUMBAI - Sugar mills are becoming increasingly reluctant to divert feedstock for ethanol production, as the prices offered for sugarcane-based ethanol remain unattractive, according to Indian Sugar and Bio-energy Manufacturers' Association Director General Deepak Ballani. They are also lower than those for maize-based ethanol. To ensure adequate feedstock diversion and maintain the viability of ethanol production from sugar-based sources, ethanol prices for all sugar-based feedstocks should be increased by at least INR 5 per litre, Ballani told Informist in an interview on the sidelines of the Sugar–Ethanol and Bioenergy Conference last week.

 

Prices of sugar-based ethanol remain relatively low, while concerns about a potential El Nio event are expected to keep sugar prices elevated. This could discourage sugar mills from diverting sugar towards ethanol production, as selling sugar may offer better returns, he said. "There has to be at least INR 5 (per litre) increase for ethanol produced from sugarcane juice and other sugar-based feedstocks such as b-heavy and c-heavy molasses. That is the minimum to at least factor in the increase in the cost of production," Ballani said.

 

For the 2025–26 (Nov-Oct) ethanol supply year, the ex-mill prices of ethanol supplied to oil marketing companies range between INR 57.97 and INR 71.86 per litre, depending on the raw material. Ethanol made from sugarcane juice is priced at INR 65.61 per litre, while ethanol from maize is priced at INR 71.86 per litre.

 

Meanwhile, sugar prices are ruling in the range of INR 38-INR 40 per kg in the domestic market and are likely to remain elevated due to an expected El Nio. This could discourage mills all the more from diverting sugar for ethanol Production.

 

Ballani said El Nio conditions could lead to a decline in sugarcane output, with Maharashtra the most affected region, as it is largely rain-fed and not irrigated. The effect of El Nio will depend on its intensity. If it is very intense, it might affect the next year's sugarcane planting, he said. It's very early to predict the production level. Normally, ISMA conducts a satellite imaging plus crop assessment in the first to third week of July. So, the association's first preliminary estimate will be ready by the end of July or the first week of August.

 

The equatorial Pacific Ocean is rapidly transitioning to El Nio conditions from neutral El Nio-Southern Oscillation conditions, private weather forecasting agency Skymet has said. A full-blown El Nio may evolve faster and earlier than expected based on previous timelines, it said.

 

The likelihood of an El Nio event between June and September could affect agricultural production in the 2026-27 (Jul-Jun) crop year, according to experts. The India Meteorological Department has projected the southwest monsoon rainfall to be below normal at 90% of the long-period average.

 

On biofuels, Ballani said the government's policy of blending 20% ethanol with fossil fuels has been successful, and the government has now also launched E85. He said that most vehicles are compatible with 20% ethanol-blended fuel.

 

Flex-fuel vehicles have been introduced in India, and E85 will be compatible with them. "But the increase in ethanol production required to support E85 will be gradual. You cannot expect an overnight rise in ethanol production capacity or utilisation due to the adoption of flex-fuel vehicles. Over time, though, it will happen," he said.

 

The government is currently conducting trials and testing on higher blends. Depending on the result, the government will most likely take a view to increase the blend in the basic blended fuel.

 

Regarding the consumer shift to flexi-fuel vehicles, Ballani said people will prefer to buy such vehicles because E85-blended fuel is INR 20 per litre cheaper than E20 fuel. The mindset of domestic consumers will eventually change, as these vehicles are made in India and using them will reduce our dependence on fossil fuel imports to some extent. Production of biofuels will also help the agricultural sector and farmers, he added.       

 

The price of E85 is INR 82.12 per litre, whereas the cost of regular E20 petrol and diesel is INR 111.21 per litre and INR 97.83 per litre, respectively, in Mumbai.

 

Ballani said that India can also run vehicles on 100% ethanol, just as Brazil does, since India is the second-largest producer of sugarcane. "I think the only way we can match is to have better varieties of sugarcane. We should have better varieties with better yields and better recovery. And we are working very intensely on this so that we have better varieties," he said.

 

With improved sugarcane varieties, production will increase in the years to come. This is how India can match Brazil in ethanol production.

 

Ballani also said that the government should increase the minimum selling price of sugar as the fair and remunerative price of sugarcane has been increasing every sugar year. The minimum selling price of sugar is currently INR 31 per kilogram and has remained unchanged since February 2019. Industry officials have been urging the government to raise the selling price to INR 38 per kg as the government raises the fair and remunerative price of sugarcane every year. The fair and remunerative price of sugarcane, which was INR 275 per 100 kg in 2019-20 (Oct-Dec), has risen to INR 365 per 100 kg in 2026-27.  End

 

Edited by Saji George Titus

 

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