India is addressing an oversupply of rice by allocating a record amount for ethanol production, a move that is particularly timely given the anticipated increase in stocks from the upcoming harvest. This approach is a marked change from the recent past when an export ban was imposed due to rice shortages. The use of rice for ethanol is assisting in managing the surplus and facilitating the achievement of ethanol blending goals, especially considering potential constraints in the supply of conventional sources such as sugarcane. The ban on rice exports, implemented for two years due to drought, was lifted in March. This year’s crop is expected to be abundant due to sufficient rainfall. A government representative stated that food security is the main concern, but the abundance of rice has prompted its utilization in ethanol production. The Food Corporation of India (FCI) has assigned a record 52 lakh metric tonnes of rice—approximately 9% of global rice trade—for ethanol, up from under 3,000 tonnes the previous year. On June 1, FCI held 59.5 million tonnes, significantly exceeding the July target of 13.5 million tonnes. The availability of rice has kept maize prices in check. Grain-based distilleries have been adapting, shifting between maize, rice, and other grains depending on price. India, a leading oil importer, is aiming to achieve a 20% ethanol blend in petrol by 2025/26, nearing this goal in May at 19.8%, thanks to the availability of rice. The reduced sugarcane supply, resulting from the 2023 drought, had threatened the realization of this objective.
