More Stories

Informist, Tuesday, Mar. 10, 2026

 

--MEIR Commodities' Sood:Too early to make sustainable jet fuel from ethanol

--CONTEXT: MEIR Commodities Chairman GK Sood's comments in an interview

--MEIR's Sood:Alcohol-jet way for sustainable aviation fuel needs big invest

--MEIR Commodities Sood: Sugar output for next 10 years seems stagnant

--MEIR Commodities Sood:See baggasse boilers in bioenergy mission next Budget

--MEIR Commodities Sood: India to export about 600,000 tn sugar in 2025-26

--MEIR's Sood: Reasonable minimum selling price needed for sugar mills

By Taniva Singha Roy and Abhijit Doshi

 

MUMBAI - It is too early for the production of sustainable aviation fuel using the alcohol-jet route in India as there is not enough ethanol for this, according to G.K. Sood, chairman of MEIR Commodities India Ltd., a Mumbai-based agricultural trading and processing firm. Also, it isn't financially viable, Sood tells Informist in an interview.

 

As production of sugar is likely to remain largely stagnant for the next 10 years, higher sucrose diversion for ethanol production could be tough. India is a huge consumer of sugar and consumption is increasing 1.5% every year, which might eat into the ethanol blending programme for motor vehicles. This will leave little space for production of sustainable aviation fuel, Sood said.

 

Talking about flex-fuel vehicles, Sood said making such vehicles requires a lot of investment. While it requires much more than 20% ethanol blending, going beyond the current blending target will take time as there is not enough raw material or feedstock.

 

According to Sood, production of sugar in India in the 2025-26 (Oct-Sept) season is likely to be 29.3 million tonnes, as estimated by the Indian Sugar and Bio Energy Manufacturers Association. Earlier, it was estimated at 30.95 million tonnes.

 

In terms of sugar exports from India, Sood said that the markets in West Asia and Afghanistan are lost amid the hostilities in West Asia. But there are markets nearby that want sugar from India on time – Sri Lanka can access India sugar in just 15 days, so can Malaysia and a few more countries.

 

Following are edited excerpts from the interview:

 

Q. The government is working on a comprehensive sustainable aviation fuel policy to support local production, and targeting a 5% blend to reduce the country's import dependence by 2030. How can the sugar Industry help in achieving the target?

A. The sugar industry pioneered the ethanol blending programme in the country. But it is too early for the industry in terms of technology to produce sustainable aviation fuel from ethanol. Ideally, sustainable aviation fuel is produced using the methyl ester route, which is derived from vegetable oils. And India is short of vegetable oils as the country imports about 60% of the domestic requirement.

 

The alcohol-jet route to produce sustainable aviation fuel will take massive investment, which will need state support. The alcohol-jet route pathway converts alcohols like ethanol or isobutanol – derived from biomass or synthetic sources –  into jet fuel.

 

It is technologically too early for India to produce jet fuel using that route. Financially too, it is unviable at the moment. Moreover, there is not enough raw material with the sugar industry to contribute as it is a seasonal industry, which works for just about 100 days. And the period will shrink because a lot of brownfield expansion is being done by units.

 

Production of sugarcane in the past 10 years has stagnated within a narrow band. It seems unlikely that it will break out of the band in the next few years. India is a massive consumer of sugar, with the consumption rising 1.5% a year, which might eat into the sucrose available for the ethanol blending programme for motor vehicles, after absorbing exportable sugar in the first instance.

 

Q. The industry has been promoting flex-fuel vehicles which will require higher ethanol. Is it possible to have higher ethanol blends at the moment, and how necessary are flex-fuel vehicles now?

A. The sugar industry is in a dilemma in providing ethanol. It is arising from a realisation that the industry is concentrated only in some parts of the country. Most of the ethanol is produced in Maharashtra and Karnataka, and it is seasonal, and then somebody has to store the ethanol for it to last. Somebody has to carry it in tankers, all over the country.

 

One smart way of using it is to have flex-fuel vehicles, so that vehicles will use it when it is available and switch to some other fuel when it's not.

 

India is growing maize crop at the rate of about 10% per year since the government has encouraged maize for the production of ethanol for the E20 programme. And there is concern expressed in the Economic Survey this year that increased planting of maize is eating into other priority crops like soybean and pulses, while both soybean oil and pulses are imported as we do not produce enough. So, it's like a Hobson's choice – either import petrol or import agricultural products. Hence, the solution to this is increasing productivity, which has been talked about for decades.

 

Q. Can India go beyond E20, and do we have sufficient capacity for flex-fuel vehicles at the moment?

A. For India to go beyond E20 and for flex-fuel vehicles, a lot of investment is required. There needs to be a distribution network and 100% ethanol tank at retail vends, else how do you serve 100% ethanol to flexi vehicle? Where is the want to refuel?

 

Brazil has such vehicles, but it also produces about 600 million tonnes of sugarcane crop. They have a much smaller population. Hence, they devote half the sucrose output for ethanol production purposes.

 

On the other hand, India has a huge population with sugarcane crop of only about 450 million tonnes. So, at the moment, the ethanol blending to go beyond 20% is unimaginable. Even if corn (maize) is taken into consideration for ethanol production, currently India has already approached the use of 16 million tonnes of corn to produce ethanol out of about 48 million tonnes of estimated output in 2025-26. 

 

So, the momentum of corn production at the cost of other priority crops will need to be maintained to sustain the ethanol programme. And for diverting more sucrose for ethanol, the next few years do not appear to be enough and molasses or juice-based ethanol has geographical concentration and seasonality issues, which limit its use. Hence, the prospects of flex-fuel vehicles in India are not promising. How do you persuade a consumer to use entirely 100% ethanol while she has to reckon with 30% less fuel efficiency unless the ethanol price is lower than the petrol price?

 

 

Q. The government has formed an inter-ministerial committee to study the viability of higher blends and a roadmap to achieve it, but there are no clear updates so far. What is happening to the committee report and what is their thinking?

A. The government is considering steps beyond E20, with a focus on cautious implementation to address vehicle compatibility and infrastructure requirements. In 2020, the government had formed an inter-ministerial committee to study the viability of higher blends and a roadmap to achieve it under NITI Aayog. The NITI Aayog in 2021 released its 'Roadmap for Ethanol Blending in India 2020-25' report, in which it mentioned that it identified a 6–7% reduction in fuel efficiency for four-wheelers using E20 fuel, along with a 3–4% drop for two-wheelers.

 

It also mentioned that while the lower energy density of ethanol causes this drop in mileage, properly calibrated engines and, in some cases, enhanced acceleration can mitigate the overall impact. So, about 250 million vehicles can be affected, including two-wheelers, which are not compliant to even the 20% blend of petroleum.

 

The working of a committee set up to investigate the feasibility of blending higher than 20% received a setback due to consumer backlash. Now, the committee has resumed working, but it seems it will be some time before it completes its work.

 

The government should have asked auto manufacturers to modify vehicles for E20 from 2018 itself. The modification has been much delayed as the vehicles manufactured only after April 2024 are compatible with the E20 blend. The manufacturers' warranties are not available for vehicles manufactured before that if the E20 blend is used, nor do insurance companies cover the damage caused to such vehicles by use of 20% blend. So, almost six years of time is lost.

 

Q. Despite being a reliable producer of green power, bagasse-based co-generation projects are not yet formally included in the Bio-Energy Mission's framework. When do you think the government will include bagasse-based co-generation projects under the mission?

A. It's unfortunate that bagasse boilers, despite being a reliable producer of green power and pioneer in green energy, have not been included in the Bio-Energy Mission's framework. However, the firing of boilers with crop residue, either directly or as pellets, is included in the scheme.

 

Both replace coal and generate green energy. To me, the exclusion of the sugar industry is because the usage of bagasse as fuel for steam and power generation is as old as the sugar industry, so why incentivise when it is a standard practice? But this is discriminatory. The government seems to have rolled out incentives directed towards combatting pollution. Rice husk burning in fields causes pollution, so it's harnessing has been incentivised, but that is not the case with bagasse.

 

The industry, however, hopes that the discrimination will be removed in the 2027 Budget.

 

Q. The government announced an additional quota of 500,000 tonnes of sugar for exports over and above the 1.5 million tonnes allocated in November. How have sugar exports progressed so far? Is Indian sugar competitive in the international market?

A. Out of the total 2 million tonnes allocated for exports by the government, India is estimated to have exported about 280,000 tonnes of sugar so far out of about 400,000 tonnes exports contracted. We expect 500,000-600,000 tonnes to be exported.

 

The recently released additional quota of 500,000 tonnes is likely to mostly lapse as even the previous quota will be only partially utilised.

 

Indian sugar is overvalued by $37 per tonne in export markets, despite being of a lower quality than what is quoted on the London exchange. On the London exchange (the benchmark global white sugar contract), refined sugar, 45 ICMUSA Colour, is traded, whereas Indian sugar is mostly of higher colour of 80 to 150 ICUMSA.

 

Q. How will the current geopolitical situation effect sugar exports from India?

A. The West Asia and Afghanistan export markets are lost for India amid the hostilities going on in West Asia. Indian sugar used to reach Afghanistan through the Pakistan route earlier, but the route has been closed after the government conducted Operation Sindoor. After that, sugar used to reach West Asia and Afghanistan through Iran, which is shut now.

 

A total of about 70,000 tonnes a month of market is lost – 50,000 tonnes in Afghanistan, and 20,000 tonnes in West Asia. India is left with Sri Lanka, Nepal, and small volumes to East Asia. Hence, export prospects are bleak.

 

Q. Some months ago, there were talks that this year, we will have surplus sugar production. Now, suddenly the situation seems to have changed and people are talking of falling output compared to the previous estimate. What has changed? Will there be any shortage of sugar in the country next year?

A. This year, in 2025-26 (Oct-Sept), the crop is likely to be 29.3 million tonnes, as estimated by the Indian Sugar &

Bio Energy Manufacturers Association. Earlier, it was estimated at 30.95 million tonnes. Science does not have enough accurate prediction methods yet, so earlier it was estimated to be higher.

 

But even the earlier estimates were wrongly described as bumper, as it was only higher compared to last year's draught-impacted 26.1 million tonnes. But when compared with output in 2023-24, when output was nearly 32 million tonnes, the 2025-26 figure is lower.

 

The government has estimated domestic consumption at 28.5-29 million tonnes. So, if consumption is even 28.5 million tonnes and production of 28.3 million tonnes, as estimated by a few trade bodies other than ISMA, there will be sufficient sugar even though the opening stocks in October 2026 might be less than the current year's opening stock. There might be some supply tightness for a couple of months, but with the imminent next year's crop, I do not expect speculative hoarding of sugar. It all depends on the size of the next crop. ISMA said the next crop will be good. Sugarcane planting for the 2026-27 season has reportedly improved in Maharashtra and Karnataka. As a result, the 2026-27 crushing season appears to be promising, ISMA said.

 

Q. The government has not increased the minimum selling price of sugar since 2019. How are mills coping with liquidity and payment to farmers? Do you think there is a need for a hike in the minimum selling price, and by when do you think the Centre will revise it and by how much?

A. When the minimum selling price for sugar was introduced in 2018, the industry that time was compelled to sell much below the cost of production as mills had a huge quantity of stock with them – more than six months of stock. Fixing of minimum selling price has never been done by the government for any other commodity ever since the Essential Commodities Act and earlier Defence of India Rules were promulgated.

 

Then the monthly sugar sales quota, which had been discontinued in 2013, was also reintroduced by the government to ensure that surplus sugar is not flowing in the market.  End

 

Edited by Avishek Dutta

 

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

 

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd. by NSE Data & Analytics Ltd., a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt. Ltd.

 

Informist Media Tel +91 (22) 6985-4000

Send comments to feedback@informistmedia.com

 

© Informist Media Pvt. Ltd. 2026. All rights reserved.