India sets zero sugar diversion for ethanol in 2026/27 tender

India has ordered oil marketing companies to cut “sugar diversion” for ethanol production to zero for the 2026/27 supply year, according to a tender issued Friday in Mumbai. The directive excludes ethanol made from sugarcane juice, sugar, sugar syrup and B-heavy molasses from the quantity being bid. India has long relied on surplus sugar to meet ethanol-blending targets, but the move highlights tension between reducing oil imports and protecting domestic sugar supplies as poor rainfall threatens output and pushes sugar prices to record highs. The tender invites bids for 11 billion litres of ethanol starting in November, allowing feedstocks like corn, broken rice and surplus rice procured by the Food Corporation of India. The government also cut incentives for corn-based ethanol.