By ChiniMandi 

India may increase its use of rice for ethanol production this year as lower kharif acreage under maize and sugarcane raises concerns about the availability of raw materials, according to senior sugar industry executives, The Economic Times reported.

Rice could contribute 15-20% more to ethanol production during the current season, industry executives said. At present, rice accounts for about 26.79% of ethanol feedstock, while sugarcane accounts for around 28%.

According to the latest government data, maize planting has declined by around 4%, while sugarcane acreage is down 0.85%.

The possible shift towards rice comes at a time when sugar prices have reached record levels amid concerns over the next sugarcane crop. Poor rainfall in Maharashtra and Karnataka, two major sugarcane-producing states, has increased concerns over lower sugar production next year.

The government is expected to ask sugar mills to limit ethanol production from sugarcane juice and B-heavy molasses and increase the use of grains instead.

Rice stocks with the government remain comfortable. Stocks, including unmilled paddy, stood at a record 68.43 million tonnes as of June 1, compared with the government’s buffer requirement of 13.5 million tonnes for July 1.

India is targeting 20% ethanol blending in petrol. If ethanol availability from sugarcane falls, the country may have to use more grain-based raw materials such as rice and maize. Adequate grain stocks could help meet the requirement, although lower crop yields could put pressure on food prices.

“This year is marked by lower rainfall, raising concerns about higher food prices in the coming months,” a senior industry executive said. The executive added that delayed and below-normal rainfall had affected the planting of several crops and could also affect yields.

Sugar prices have risen to record levels over the past month and are expected to remain high over the next few months during the festival season. The government has already restricted sugar exports and recently imposed stockholding limits on traders to control domestic prices and ensure sufficient supplies.

The food ministry has allocated 72 lakh tonnes of rice from government stocks to distilleries for the next ethanol supply year, compared with 52 lakh tonnes in 2025-26.

Another 55 lakh tonnes of 100% broken rice has been made available through e-auctions for ethanol manufacturers to purchase.

The higher availability of rice could give the government a more stable source of raw material as it considers increasing ethanol blending beyond the current 20% level.

Published Date: August 11, 2026