
According to a report by BBC Hindi, the diversion of sugar for ethanol production has become a significant factor in the domestic sugar market in India. During the 2025-26 sugar season, approximately three billion kilograms of sugar were utilized for ethanol manufacturing, representing nearly 10 percent of the nation's total sugar output.
This shift is part of India's broader Ethanol Blended Petrol (EBP) program, which aims to reduce the country's reliance on imported crude oil by increasing the proportion of ethanol mixed with gasoline. While the initiative supports environmental and energy security goals, it has created a complex supply-demand dynamic within the sugar industry. By diverting a substantial portion of the crop away from food-grade sugar production, the policy exerts upward pressure on domestic prices.
Market analysts suggest that the balance between supporting farmers through ethanol procurement and maintaining affordable sugar prices for consumers remains a key challenge for policymakers. As the government continues to incentivize ethanol production to meet its blending targets, the impact on the retail price of sugar is expected to remain a subject of ongoing economic scrutiny.
The report provides specific data regarding the diversion of sugar for ethanol production in India. While it is a single-source report from BBC Hindi, the figures align with known Indian government policies regarding the Ethanol Blended Petrol (EBP) program and its impact on domestic sugar supply.
No corroborating trusted sources found.
Original report: BBC Hindi