IGrain India Exclusive report: Its Rice Vs. Sugar Vs. Corn on Ethanol
14-Nov-2025 02:51 PM
IGrain India Exclusive report: Its Rice Vs. Sugar Vs. Corn on Ethanol
GOI allocates rice for ethanol
★ The Government of India has allocated 24 lakh tonnes of rice per year for ethanol production for the next two years. This season, the Reserve Sale Price (RSP) for rice supplied to distilleries was ₹2,250/quintal till September 2025 Pan India, which has now been revised to ₹2,320/quintal, in line with the increase in MSP.
★ This updated rate will apply to a total quantity not exceeding 52 lakh tonnes.
★ As per the GOI mandate, 40% of grain-based ethanol must be produced using FCI rice. So far, around 32 lakh tonnes of FCI rice has already been utilised for ethanol production.
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Corn-based ethanol:
★ Oil Marketing Companies (OMCs) have placed bulk orders of about 4.8 billion litres of corn-based ethanol. Producing this quantity requires approximately 140–150 lakh tonnes of maize.
★ Last year, India produced 380 lakh tonnes of maize, out of which 130–140 lakh tonnes went into ethanol production.
★ This year, maize production is expected to increase by 40–50 lakh tonnes, reaching around 440 lakh tonnes.
★ Direct human consumption of maize in India is very low. Traditionally, 60% of maize was consumed by poultry and livestock feed, but this share is now declining as ethanol consumption rises sharply.
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Economics of Ethanol from Rice vs. Corn Vs. Sugar
Corn (12% moisture)
1 tonne maize → 380 litres ethanol
Ethanol price: ₹71.86/litre
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FCI Rice
1 tonne rice → 450 litres ethanol
Ethanol price for 2025–26: ₹60.32/litre (up from ₹58.50/litre last year)
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Sugar
★ FRP of Sugarcane increased from Rs. 305 to 355 for sugar year 2025-26 which is 16.5% increase.
★ As Per ISMA Bare Minimum Production cost from B Molasses is 66.09 and Sugar cane juice is 70.70 rs./liter and current prices are 60.73 and 65.61/ liter respectively.
★ ISMA asked government to increase ethanol prices from B molasses to at least 70.65 and from Juice to 76.33.
★ Sugar Industry is in stress as they have invested 40,000+ crore rupees to enhance ethanol manufacturing an basis of Niti Aayog Road map- 2021.
★ In year 2019-20 share of sugar industry in ethanol was 91% which is reduced to 28% in 2025-26.
★ Now except Rice industry Maize and Sugar industry seeking help from government to increase allocation of ethanol.
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Effect on Maize Prices
★ Earlier Ethanol was made exclusively from Sugar. Last year restriction on manufacturing of ethanol from Sugar, Sugarcane and B molasses was imposed resulting huge demand of Corn.
★ Now these restrictions are over and ethanol manufacturing is allowed.
★ The situation changed drastically when FCI rices is being used to make ethanol.
★ Now Sugar and Corn industry is in stress as the demand on rice based improved.
★ Usage of Rice, Sugarcane juices, B molasses in ethanol reduced overall demand of Maize in market resulting drop down in prices.
★ There is no impact on rice industry as its being sold from central pool at discounted prices not by private players.