India puts food before fuel as El Niño dents ethanol ambitions; blending in petrol may fall to 15%
BusinessLine 1 hr ago·4 Nov 2026, 4:52 am
India has announced a significant reduction in its ethanol blending target for petrol, lowering the goal from 20% to 15% for the current year. This shift is driven by a severe El Niño weather pattern, which has caused a shortage of key crops like corn and sugarcane. The government has prioritized food security by diverting these grains away from fuel production to ensure stable supply for the domestic market.
For investors, this move signals a strategic pivot away from the aggressive biofuel expansion previously anticipated. It suggests that the government is willing to sacrifice some growth in the green energy sector to maintain food stability. While this may dampen enthusiasm for ethanol producers in the short term, it highlights the critical balance policymakers must strike between energy security and agricultural needs.
Investors should monitor the government's next steps regarding crop procurement and storage. If the food supply stabilizes, there is potential for blending targets to be revised upward in future years. However, for now, the focus remains on managing the immediate impact of the crop deficit on both the food and fuel sectors.
Excerpt from BusinessLine
Food security prioritised over biofuel as crop shortages hit corn and sugarcane New Delhi curbed use of sugar, corn as prices hit record highs Setback for Modi's plan to reduce dependence on imported oil Proportion of ethanol in petrol may dip to 15% from current 20% India’s drive to replace imported oil with…Read the original at BusinessLine
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