India Lifts Ethanol Production Ban, Affecting Sugar Supply

India has lifted restrictions on using sugarcane juice, B-heavy, and C-heavy molasses for ethanol production starting in November 2024, aiming to boost renewable energy and reduce fossil fuel dependence. This policy shift is expected to tighten global sugar supply, as India is the world's second-biggest sugar producer. The move has led to a significant surge in the stock prices of sugar and ethanol companies, with shares rising up to 16%. Additionally, the government has allowed distilleries to purchase up to 2.3 million metric tons of rice from the Food Corporation of India for ethanol production, addressing surplus stock issues. Authorities will periodically review the measures to ensure adequate domestic sugar supply. This decision reflects a broader strategy to balance food security with the need for increased ethanol output.