India's Sugar Economy
Grain vs Cane Ethanol: Food or Fuel?
How India's ethanol programme uses both sugarcane and grains like rice and maize, and the debate over using food crops for fuel.
India reached 20 percent ethanol blending in petrol in 2025. Where does the ethanol come from?
Feedstocks
- Sugarcane: juice, B-heavy molasses and C-heavy molasses.
- Grains: maize, broken rice and surplus FCI rice.
Shift to grains
Grain-based ethanol grew rapidly, with maize becoming a major feedstock.
Food vs fuel
- Using rice and maize for fuel can raise food and feed prices.
- Maize prices rose, and India imported maize at times, affecting poultry and livestock feed costs.
- In 2023, the government temporarily restricted cane juice use for ethanol amid concerns over sugar supply.
Benefits
- Lower oil imports.
- Income for farmers and mills.
- Lower emissions compared with petrol, though estimates vary.
Trade-offs
- Water: cane and rice are thirsty.
- Land diverted from food.
- Vehicle compatibility at higher blends.
Second-generation ethanol
2G ethanol from crop residues like rice straw avoids food competition. Panipat has a 2G plant (2022), though costs are high.
The maize boom
Ethanol demand pushes maize prices up. Maize farmers earn more, but poultry farmers pay more for feed, raising chicken prices.
Thinking ethanol has no effect on food
Using grains and cane for fuel can raise food and feed prices.
Key takeaways
- India's ethanol comes from cane and grains.
- Grain ethanol, especially maize, grew rapidly.
- Food vs fuel concerns include higher feed prices.
- 2G ethanol from residues avoids food competition.
No recording for this one yet - EconReader can read it aloud for you.