
đ° India Turns Surplus Rice into Ethanol: A Game-Changer for Farmers & Fuel
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India rice surplus for ethanol 2025 : A Game-Changer for Farmers & Fuel :India is converting 5.2âŻMâŻMT of surplus rice into ethanol to ease stockpiles and meet its 20% blending targetâhereâs what it means for farmers, fuel, food, and the environment.
India rice surplus for ethanol 2025 :Introduction
India, the worldâs largest rice producer and exporter, is redirecting a record 5.2 million metric tons of surplus rice into ethanol production. This strategic pivotâdriven by a bumper harvest of 146.1âŻMâŻMT and FCIâs 59.5âŻMâŻMT stockâaims to alleviate storage challenges and advance Indiaâs ethanol blending goal of nearly 20% in petrol (reuters.com).
đ India rice surplus for ethanol 2025 : Why This Shift Matters
đ˘ 1. From Food Surplus to Fuel
- India rice surplus for ethanol 2025 A bumper monsoon-driven crop (146.1âŻMâŻMT vs. domestic demand of 120.7âŻMâŻMT) led to unprecedented stockpiles (reuters.com).
- FCI reserves soared to 59.5âŻMâŻMTâwell above the 13.5âŻMâŻMT buffer norm (reuters.com).
â˝ 2. Accelerating Ethanol Blending
- Rice allocation supports Indiaâs ethanol blending reaching 19.8%, close to the 20% milestone (reuters.com).
- Helps offset lower sugarcane availability post-2023 drought (reuters.com).
đž 3. Stabilizing Other Grain Markets
- Easing demand for corn, avoiding import dependencies and price spikes (brecorder.com).

đ§ Who Gains & Who Faces Challenges
- Farmers: Easier offloading of surplus, improved income when distilleries buy at MSP.
- Consumers: More stable fuel prices via ethanol-grade blending.
- Economy: Reduced petroleum imports and favorable balance of payments.
- Concerns: Rice diversion could impact food security if stock levels fall short (thehindubusinessline.com, counterview.in, southasiamonitor.org).
â ď¸ India rice surplus for ethanol 2025 : Key Risks & Policy Considerations
- Pricing incentives:India rice surplus for ethanol 2025 Ethanol costs (âš58.5/L) vs. rice price (âš22,500/T) need alignment to encourage production (brecorder.com).
- Food security: Ethical questions around using staple grain for fuel (southasiamonitor.org).
- Export dynamics: India already captures 40%+ of global rice trade; diverting too much reduces overseas supply .
âď¸ Expert Take & Real-World Reaction
- Industry voices urge price adjustments to push rice-to-ethanol conversion further .
- Policy analysts call for a balanced approachâexport surplus, support farmers, but safeguard food access .

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Why is India turning rice into ethanol?
A bumper 146.1âŻMâŻMT harvest against a 120.7âŻMâŻMT demand led to massive stockpiles. Converting surplus to ethanol helps ease storage pressure and meet fuel blending targets
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How much rice is being diverted?
FCI has allotted 5.2âŻMâŻMT of surplus rice for ethanol productionâaround 9% of global rice exports in the 2024/25 year
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Whatâs driving this policy shift?
Sugarcane supplies dipped post-2023 drought. Government seeks alternative raw material to maintain ethanol blending and fuel security
đď¸ Recent Policy Developments & Context
- India rice surplus for ethanol 2025 :In February 2025, Indian industry bodies called for lifting the ban on exporting 100% broken riceâstockpiled at a record 67.6âŻMâŻMT, nearly nine times the buffer norm. This move would relieve surplus and benefit food-deficit countries (especially in Africa) and ethanol producers nextias.com+3reuters.com+3startexportindia.com+3.
- The Food Ministry also allocated a further 2.8âŻMâŻMT of FCI rice at subsidized rates (âš2,250/quintal) for ethanol, supplementing the previous 2.4âŻMâŻMT â totaling 5.2âŻMâŻMT in 2024â25 startexportindia.com+3financialexpress.com+3outlookbusiness.com+3.
đ Broader Impacts: Food, Farmers, & Fuel
â Economic & Farmer Implications
- Revenue perspective: FCI sells rice at about âš2,250/quintal (~âš22.50/kg), while distilleries pay âš58.50/Ltr for ethanol â this margin often hampers large-scale production unless price support adjusts .
- For farmers, these policies help offload inventory at MSP, supporting incomes and reducing wastageâbut smallholders may miss out on distillery contracts financialexpress.com+1thehindubusinessline.com+1.
â ď¸ Food Security & Ethical Concerns
- Critics argue that diverting staple grains risks food vs. fuel conflicts, especially in a country with high reliance on the Public Distribution System supplying rice to ~two-thirds of the population en.wikipedia.org+5newsclick.in+5outlookbusiness.com+5.
- Research indicates that using food crops like rice and maize for ethanol may compromise nutrition and displace feedstocks such as soybean meal, causing cascading market effects downtoearth.org.in+1southasiamonitor.org+1.
đą Environmental & Resource Trade-offs
- Rice is a water-intensive crop; expanding its use for fuel raises environmental concernsâparticularly in water-stressed regions startexportindia.com+8indianexpress.com+8nextias.com+8.
- Lifecycle analyses and experts suggest exploring second-generation (2G) ethanol (e.g., algae, crop residues), which avoids these pitfalls indianexpress.com+2southasiamonitor.org+2nextias.com+2.
đ Global Market Exposure & Export Strategy
- India rice surplus for ethanol 2025 India is already exporting record volumes (~22.5âŻMâŻMT in 2025), which leaves less rice for ethanol or domestic useâeven as global demand for sugar- and biomass-based ethanol grows reuters.com.
- A key strategic choice emerges: bolster rice-to-ethanol domestically or divert more surplus to broken-rice exports, which could improve global food access and farmer income
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