Overview
- The India Meteorological Department declared the onset of El Nino on June 12, and forecasters say it is likely to persist through April 2027, raising the odds of a below‑normal southwest monsoon.
- India rolled out E20 petrol nationally on April 1 and industry estimates project ethanol demand will rise to about 13.2 billion litres in the 2026‑27 ethanol year, increasing pressure on feedstocks.
- Sugar supplies look tight, with industry groups warning closing stocks may be near 3.5 million tonnes by September 30, 2026, and the government has already restricted sugar exports until September 2026 to protect domestic availability.
- Analysts and millers say reduced sugarcane yields from a weak monsoon could force wider use of rice and other grains for ethanol, raising food security and groundwater stress in water‑stressed farming regions.
- Policy tools to manage the risk include export curbs, encouragement of maize and damaged or surplus rice use, and investment in residue‑based and second‑generation ethanol technologies, but outcomes will hinge on monsoon performance and fast coordination.