This season’s harvest of sugar is up 30% from last year, according to the Indian Sugar Mills Association.
The price of sugar is also likely to rise, after the government rescinded a 2016 order to limit stockholding of the commodity.
Reuters is reporting that India’s ethanol supply will follow the increased sugar output. A 5% ethanol mandate is in effect in India, but whether this is effective across the country is uncertain. The Government planned to increase the blending obligation to E20 by the end of this year according to its 2009 National Policy on Biofuels.
The reality is that, according to Platts Kingsman numbers, the blending rate as of this year is only 2.23%. The law dictates that Indian blenders can only source ethanol domestically and they have to compete with distilleries for supply of the commodity.