India’s Ethanol Blending Push: A Boost for Sugarcane Utilisation and Millers’ Finances
India’s 20% ethanol blending target by ESY 2025 requires increased sugarcane utilization, optimizing sugar inventory and enhancing millers’ cash flows. Grain-based ethanol output is expected to rise to 600 crore litres, while sugarcane-derived ethanol will bridge the balance, utilizing existing capacity and managing high sugar inventories.
The Indian government’s goal to blend 20% ethanol in petrol by Ethanol Supply Year (ESY) 2025 requires an uptick in sugarcane utilization, according to a Crisil Ratings report released on Monday. This objective is poised to optimize sugar inventory levels and enhance millers’ cash flows.
The report specifies that ESY spans from November to October, and meeting the 20% ethanol blending target—amounting to 990 crore litres annually—necessitates the efficient use of both grain and sugarcane feedstock. The annual ethanol output from grains alone is projected to significantly surge to 600 crore litres by the next season, a pronounced increase from this season’s 380 crore litre estimate.
Moreover, sugarcane-derived ethanol production will need to bridge the balance, a viable option given the existing substantial capacity. This shift will further optimize sugar inventories, particularly due to the high carry-over stock anticipated at the season’s end, amid government restrictions on ethanol production diversions and exports.
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