India puts food before fuel as El Niño dents ethanol ambitions; blending in petrol may fall to 15%

What happened

India’s weak monsoon has reduced corn and sugarcane crops, while prices for corn and sugar reached record highs. New Delhi has curbed their use for ethanol to prioritise food security, and ethanol’s share in petrol may fall below the 20% target, potentially reaching 15%.

Confirmed

Global impact / market context

Less ethanol blended into petrol would weaken India’s effort to replace imported oil with domestic biofuel. If the share falls, the country could spend more on overseas crude, while reduced demand for corn and sugar as fuel feedstock may ease pressure on food supplies and prices.

Analyst inference

The article says the programme has saved nearly ₹2 lakh crore in oil import costs since 2014, with annual savings estimated at ₹43,000 crore at 20% blending. A shortfall from that rate could reduce those savings, although the article gives no forecast of the amount.

Analyst inference

What to watch

1. Watch for the actual ethanol share in petrol during the supply year that began this month; the article says it may fall below the official 20% target. Analyst inference
2. Watch for further government decisions on using corn and sugar for fuel, since the article says New Delhi has curbed their use to protect food security. Confirmed
3. Watch whether monsoon-related crop shortages and record corn and sugar prices persist, as these pressures could constrain ethanol production and increase reliance on imported oil. Analyst inference

Evidence

• Original source link unavailable