Overview
- State-run oil marketing companies issued a joint quantity bid on October 16 that seeks roughly 11 billion litres of denatured ethanol for the November 1, 2026–October 31, 2027 supply year.
- The tender explicitly excludes ethanol made from sugarcane juice, sugar, sugar syrup and B‑heavy molasses and allows offers only from C‑heavy molasses, maize, damaged foodgrains, surplus FCI rice and other National Biofuels Policy feedstocks.
- The maize incentive was cut by ₹3 per litre, lowering the effective procurement price to ₹68.86 per litre, a change industry groups say will squeeze margins for grain-based distillers.
- Markets reacted quickly with major listed sugar firms seeing share declines of about 2%–6% on October 19 as mills lost a key outlet for sugar and higher-margin ethanol sales.
- The tender forces operational limits that could slow supply — first-quarter allocations remain subject to pending court cases, suppliers must use their own registered distilleries, third‑party trading is banned, and industry bodies such as ISMA are pressing for higher C‑heavy molasses prices and assured allocations to protect mills and farmers.