Grain-based distilleries worried about low allocation; Sugar mills ask for exports
Oil Marketing Companies have allocated 1,048 crore litres of ethanol for ESY 2025–26 (Cycle 1) against 1,776 crore litres offered. Grain-based distilleries received 760 crore litres, while molasses-based units got 288.6 crore litres. Industry leaders urged the government to permit sugar exports, citing reduced ethanol diversion and rising sugar output.
The Oil Marketing Companies (OMCs) on Friday announced allocation of around 1048 crore litres of ethanol against 1776 crore litres of offers submitted by manufacturers across the country for Ethanol Supply Year (ESY) 2025-26 – Cycle 1. In September, the OMCs had invited tenders for the supply of 1050 crore litres of ethanol for ESY 2025-26.
Lower allocation
Arushi Jain, Joint Secretary, Grain-based Ethanol Manufacturers Association (GEMA), an industry body safeguarding the interests of grain-based ethanol producers, said that the grain distilleries that don’t have Long Term Offtake Agreement (LTOA) have received as low as 19% allocations against their offer quantity.
“It is completely unviable to operate plants at such low production targets.”
Timely sugar export policy
Grain-based distilleries have been given a higher allocation of approximately 760 cr. litres, and molasses-based distilleries have been allocated around 288.6 cr litres.
Vedang Pittie, Executive, Harinagar Sugar Mills Ltd. asked the Government to allow sugar exports in the current season. “With the ethanol tenders out and the allocations thereof now in the public domain, it clearly emphasises that the government should expedite the decision to export sugar for the sugar season 2025-26. The sugar sector got an allocation of only 62% of what it had offered; hence, there would be more sugar produced, and the diversion into ethanol would be reduced”.
He added that the Government can export sugar in tranches as well.
“The first tranche could be announced by the end of November 2025, and the next one could be done in January 2026 after the Government has assessed how the present crushing season is shaping up. This would help in maintaining adequate sugar stocks, resulting in comfortable sugar prices in the domestic market,” he concluded.
During the ongoing ESY 2024–25, OMCs have received a total of 904.84 crore litres of ethanol from November to September. The total contracted quantity was 1131.70 crore litres. Of this, 598.14 crore litres of ethanol have been sourced from grains, while sugar-based feedstocks have contributed 306.70 crore litres.
The average all-India ethanol blending percentage as of September 2025 stands at 19.17 per cent.
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