India eyes ethanol exports as surplus sugar, grain feedstock output boosts capacity: minister

India should begin exporting ethanol as surplus sugar, wheat, corn and rice push production above domestic blending requirements, transport minister Nitin Gadkari said Sept. 24, just a day after state-run oil companies floated their first ethanol tender for the 2025-26 supply year.

"It is the time for India's futuristic development. We need to reduce our imports and increase our exports. As far as the surplus of ethanol, it is now the requirement of the country that we export ethanol," Gadkari said at the International Conference and Exhibition on Bioenergy and Technologies in New Delhi.

Tender and surplus outlook

Oil marketing companies on Sept. 23 issued a tender seeking 10.5 million kiloliters of anhydrous ethanol for ESY 2025-26 (Nov–Oct), setting benchmark procurement prices between $653-$745/cu m depending on feedstock. Surplus rice-based ethanol was priced at $680/cu m, up from about $660/cu m a year earlier.

Government officials estimate India will require 12 million kl of ethanol in ESY 2025-26 to achieve uniform 20% gasoline blending nationwide, of which about 4.5-4.8 million kl will come from sugarcane-based feedstocks.

With production capacity reaching 18.22 billion liters/year as of June 30, India has already hit its E20 blending target five years ahead of schedule, averaging 19.05% blending by July in the current supply year.

Farm and policy impacts

Gadkari said ethanol has boosted farm incomes by about Rupees 450 billion ($5.4 billion) annually. Corn prices, he noted, have more than doubled after being approved for ethanol production. He added that 70% of ethanol production now comes from surplus food grains.

The minister also highlighted plans to produce ethanol and bio-CNG from rice straw, with 500 plants under development to address both Delhi's stubble-burning pollution and energy diversification.

Market marker

Gadkari signaled the government is also considering isobutanol-diesel blends after ethanol-diesel trials showed limited success. Isobutanol, with higher energy density and better engine compatibility, could complement ethanol and help diversify India's biofuel basket.

The Asian ethanol market declined day over day Sept. 24, with both fuel-grade and industrial-grade prices falling.

China exported 2.91 million liters of ethanol in August, a 28.7% increase from 2.26 million liters in July, according to customs data released Sept. 21.

The Asian fuel ethanol marker was down 67 cents/cu m day over day at $618/cu m CIF Philippines on Sept. 24, tracking movement in US futures.

Outright benchmark Chicago terminal ethanol fell 1 cent day over day, closing at $1.898/gal, marking the fourth consecutive day of decreasing levels.

Platts assessed industrial-grade B ethanol down $4/cu m day over day at $635/cu m CFR Ulsan on Sept. 24 amid limited market activity.