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Business Today

India cuts 2025-26 sugar output estimate to 31 million tonnes as ethanol diversion rises

AI Market Summary
India's sugar output estimate for 2025-26 was cut to ~31mt as cane supply weakens and feedstock is diverted to ethanol ahead of nationwide E20 implementation in April 2026. A likely shift of ethanol production toward maize and rice could tighten grains used in animal feed, lifting input costs for poultry and pressuring food inflation. The story signals broader supply-demand strain across biofuel-linked agricultural commodities.
Impact level
● Medium
Affected assets
NCCOSUGAR2USD/USDT-0.22%
AI Insight · NCCOSUGAR2USD/USDTAI Insight
● Neutral
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India’s sugar industry has lowered its 2025-26 sugar production estimate to 31 million tonnes from nearly 35 million tonnes, citing weaker sugarcane output and the diversion of more than 3 million tonnes of cane to ethanol. E20 petrol—containing 20% ethanol—is set to become the nationwide standard from 1 April 2026, keeping ethanol demand elevated. Grain ethanol producers say maize-based ethanol demand could rise by 40-50% next year if rice supplies are unchanged, potentially tightening supplies for poultry feed.
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