India halts sugar-based ethanol diversion for 2026-27
India barred sugar-based feedstocks from a 1,100 crore-litre ethanol tender for 2026–27, shifting procurement toward maize, C-heavy molasses and grains. Indian Oil Corporation rose 1.2% while Bharat Petroleum Corporation declined 0.1% on 16 Oct, according to OI Charts data.
pre-market2 sources ↓machine-written, see hownot a recommendation
- BPCL close
- ₹293.50
- On the day
- -0.07%
- Futures OI, long unwinding
- -0.0%
- Put-call ratio
- 0.76
- Max pain
- ₹300.00
India barred oil marketing companies from procuring ethanol made from sugarcane juice, sugar, sugar syrup and B-heavy molasses for the 2026–27 supply year. The tender issued on 16 Oct 2026 seeks around 1,100 crore litres for deliveries from 1 Nov 2026 to 31 Oct 2027, prioritising domestic sugar availability amid concerns over lower output and elevated prices. 🛢️
The procurement remains open to ethanol made from C-heavy molasses, maize, damaged food grains, surplus rice supplied through the Food Corporation of India and other feedstocks allowed under the National Policy on Biofuels. Indian Oil Corporation, Bharat Petroleum Corporation, Hindustan Petroleum Corporation, Mangalore Refinery and Petrochemicals and Numaligarh Refinery are participating. The decision highlights the policy trade-off between maintaining the ethanol-blending programme and protecting sugar supplies. Poor rainfall in Maharashtra and Karnataka has added to concerns over cane availability, while festive demand has kept attention on domestic prices. 🍬
For the listed oil-marketing companies, the immediate market read was mixed. OI Charts data for 16 Oct showed Indian Oil Corporation at ₹130.38, up 1.2% on the day and 3.2% over five sessions, while its futures showed short covering with open interest down 0.1%. Its 27 Oct options expiry had a ₹132.50 max pain level, the largest call open interest at ₹135 and the largest put open interest at ₹125. The figures indicate the near-term options positioning is concentrated around these levels rather than showing a clear directional outcome.
Bharat Petroleum Corporation closed at ₹293.50, down 0.1% on 16 Oct and up 2.0% over five sessions. Its futures showed long unwinding, with open interest down by less than 0.1%. The 27 Oct expiry had ₹300 max pain, with both the largest call and put open interest at ₹300. Its put-call ratio was 0.76, compared with 0.82 for Indian Oil Corporation. The next watchpoints are the OMC tender allocations, feedstock-wise procurement rates and any further government steps on sugar availability or ethanol blending. ⚖️
Source: The Federal, 17 Oct 2026
Not investment advice. For informational purposes only.