India implements sugar stock limits and restricts ethanol diversion

The Government of India has introduced new measures to stabilize sugar availability and prices for the upcoming festive season. Effective from 15 October 2026 to 30 November 2026, the government has reduced the stock holding period for sugar dealers to 15 days and capped the stock holding limit at 1,000 quintals. Exceptions apply to Assam and the Kolkata metropolitan area, where the limit is set at 2,000 quintals due to specific logistical and regional supply requirements.

In tandem with these regulatory changes, India is expected to halt the diversion of sugarcane juice, syrup, and B-heavy molasses for ethanol production during the 2026-27 ethanol supply year. This decision aims to prioritize domestic sugar supplies following an estimated 11% shortfall in sugar production during the 2025-26 season caused by crop diseases, waterlogging, and adverse weather.

While the restriction on sugarcane-based feedstock may impact ethanol sourcing, analysts suggest that India's 20% ethanol blending target remains achievable, as nearly three-quarters of the country's ethanol production is now derived from grains such as maize.