Grains Lead, Sugarcane Holds Firm: India's Ethanol Supply Mix in ESY 2025–26

India's Ethanol Supply Year 2025–26, which runs from November 2025 to October 2026, has recorded cumulative supplies of 717 crore litres against a contracted target of 1,048 crore litres — an overall achievement rate of 68 per cent as of June 2026, according to data published by the All India Distillers' Association (AIDA).

Of the total contracted volume, oil marketing companies (OMCs) allocated 759 crore litres (72%) to grain-based distilleries and 289 crore litres (28%) to sugar-based units. The aggregate supply picture, while broadly on track, masks a notable performance gap between the two feedstock categories — one that has direct implications for how future contracts may be structured.

Grain-based distilleries have supplied 480 crore litres, accounting for approximately 67 per cent of total volumes. Within this category, maize is the single largest contributor at 258 crore litres — or about 36% of all ethanol delivered so far. Surplus Food Corporation of India (FCI) rice has contributed 177 crore litres (nearly 25%), while damaged food grains account for a further 45 crore litres.

Sugarcane-based feedstocks collectively delivered 238 crore litres, or 33% of total supply. Breaking this down further:

• Sugarcane juice: 144 crore litres (~20% of total)
• B-heavy molasses: 82 crore litres

The split underlines how India's ethanol programme now draws meaningfully from across the agricultural value chain, reducing exposure to any single commodity's production cycle.

Despite holding a smaller contracted share, sugar-based distilleries have fulfilled more than 82 per cent of their obligations — a rate significantly higher than the approximately 63 per cent recorded by grain-based units over the same period.

AIDA's data suggest that the sugarcane segment's established supply chains, processing infrastructure, and feedstock proximity to distilleries have translated into more consistent delivery performance. Grain-based units, while dominant in volume terms, appear to be experiencing headwinds — whether from feedstock procurement logistics, moisture or quality issues in damaged grain supplies, or capacity utilisation constraints — that have kept their fulfilment rate comparatively lower. For OMCs managing blending targets, this reliability differential is as commercially significant as the raw volume figures.

AIDA has attributed the programme's overall supply stability to the deliberate diversification of feedstocks across sugarcane derivatives, maize, FCI rice, and damaged food grains. The association noted that drawing from multiple agricultural sources has strengthened supply resilience, reduced dependence on any single crop, and supported uninterrupted ethanol availability throughout the year.

This multi-feedstock design is increasingly relevant as India's agricultural output — whether sugarcane yields influenced by monsoon variability, or grain surpluses managed through FCI — can fluctuate materially from season to season. By spreading procurement across crop categories, the programme has built a structural buffer against localised production shocks.

India has already cleared the E20 ethanol-blending milestone, and industry stakeholders are now pressing for policy support to push further. AIDA has pointed to the need for incentives and regulatory frameworks covering:

• Higher ethanol blend mandates beyond E20
• Flex-Fuel Vehicles (FFVs) that can run on variable ethanol-petrol ratios
• Ethanol-diesel blending programmes
• Next-generation biofuels that can utilise the significant distillery capacity already created

For farmers supplying sugarcane, maize, and other feedstocks, the trajectory of these policies will directly determine demand signals and, ultimately, farm-gate prices in the seasons ahead. Policymakers will need to balance feedstock economics, food security considerations, and blending infrastructure as the programme scales into its next phase.