India’s ethanol program could curb future sugar exports: report

A research study Monday found that India, a major sugar exporter in recent years, may play a lesser role in its big export due to the center’s ever-expanding ethanol program.

The study, titled “Asia Biofuel Outlook,” by BMI, a unit of Fitch Solutions, says India’s increased blending of ethanol in gasoline is an attempt to curb oil product imports and carbon emissions. This will support global sugar prices, it said.

According to the BMI, India is currently in a rapid expansion of additional ethanol production, where biofuel is mainly produced from sugar cane.

An increase in ethanol plants will increase the country’s consumption of sugar cane in the production of the fuel and limit the amount of sugar produced, it said.

In addition, the US Department of Agriculture (USDA) said that India’s ethanol blending rate is 11.5 percent while the government aims to reach 20 percent by 2025.

The report said that while India’s 2025 target appears doubtful, if successful the program will limit exports of feedstock for ethanol production.

The BMI also underscored Indonesia’s attempt to introduce an ethanol blending program with an initial 5 percent share and a target of 10 percent by 2030.

Because Indonesia is not a regular sugar exporter, the program would likely not provide additional support for global sugar prices, BMI said.

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