India's New Frontier: Turning Rice into Fuel

India is channeling a record volume of its rice stocks toward ethanol production, aiming to address burgeoning inventories that could increase with the forthcoming harvest. This approach marks a shift from past shortages that led to export restrictions, reflecting a strategic move in response to an extraordinary surplus.

Transforming more rice into ethanol helps manage the stocks while keeping India's ethanol blending program aligned with its goals, despite diminished supplies of traditional feedstock sugarcane. The country recently lifted export limitations that previously curtailed rice distribution due to subpar weather conditions, but abundant monsoon rains are anticipated to yield a bountiful crop this season.

With the Food Corporation of India allocating a historic 5.2 million metric tons of rice for ethanol, equivalent to nearly 9% of global rice shipments for the 2024/25 marketing year, priorities are shifting. India's ethanol blending goal of 20% by 2025/26 is nearly met, spurred by its liberal use of available rice. Continuing strong export activities may also impact global rice dynamics, challenging competitors like Thailand and Vietnam.

(With inputs from agencies.)