The Indian Sugar & Bio-Energy Manufacturers' Association (ISMA) has welcomed a decision to exclude ethanol made from sugarcane juice, sugar syrup and B-heavy molasses from the latest procurement tender for the 2026-27 supply year. The industry body said the move would help preserve adequate domestic sugar supplies while supporting the country's petrol-blending programme.

The tender was issued on October 16 by Bharat Petroleum Corporation (BPCL) on behalf of oil marketing companies (OMCs). It seeks bids for around 11 bn litres of ethanol for the supply year beginning in November, to meet the requirement of blending 20 per cent ethanol with petrol.

ISMA said the policy represented a calibrated approach to balancing sugar availability with ethanol supply. It said domestic sugar consumption should remain the foremost priority, particularly during a season when emerging El Nino conditions and weather variability in key sugarcane-growing regions could affect crop yields and sugar production.

Under the tender, ethanol produced from sugarcane juice, sugar syrup and B-heavy molasses has been excluded, while ethanol made from C-heavy molasses remains eligible. ISMA said this would allow sugar mills to continue contributing to ethanol production without diverting recoverable sugar from domestic consumption.

The association, however, raised concerns about preferential allocation for dedicated ethanol plants holding long-term offtake agreements. Although the provision applies to the 2026-27 procurement exercise, ISMA said carrying it into subsequent supply years could disadvantage sugar mills and urged the government to review the framework before future tenders.

The Centre has introduced several measures in recent months to strengthen domestic sugar availability and contain price pressures. ISMA's position supports continuing ethanol production from sources that do not reduce recoverable sugar, while seeking a procurement structure that provides mills with fair access to future supply opportunities.