Desk note · industry · Energy policy / agriculture
A 16 October 2026 tender from state oil marketers set sugar diversion for ethanol at zero in the 2026–27 supply year, steering bids toward corn and rice feedstock while sugar prices sit at records after weak rains in Maharashtra and Karnataka.
On 16 October 2026, Indian Oil Corporation, Bharat Petroleum Corporation, and Hindustan Petroleum Corporation issued a joint ethanol procurement tender for the supply year beginning November 2026. The document states that the Government of India directed that sugar diversion for ethanol be reduced to zero for 2026–27. Bidders were not invited to supply ethanol produced from sugarcane juice, sugar, sugar syrup, or B-heavy molasses. The tender instead covers 11 billion litres from feedstocks such as corn, broken rice, and surplus rice held by the Food Corporation of India. The procurement incentive for corn ethanol was cut to ₹2.79 per litre from ₹5.79, lowering the reference price to ₹68.86 per litre from ₹71.86.
India has pushed ethanol blending to cut oil imports and meet E20 petrol nationwide, but mills have long used surplus cane to make fuel alcohol. With domestic sugar prices at records and rainfall shortfalls threatening Maharashtra and Karnataka output, policymakers are prioritising sweetener supply over another ethanol route. Oil marketing companies must now lean on grain-based ethanol, which shifts margins to distillers and farmers in corn belts while cane-heavy states see less diversion demand. Motorists on older vehicles still worry about blend compatibility, but this change is really a food-versus-fuel trade-off inside the cabinet’s supply-year rules.
If you run a sugar mill or farm in western or southern cane districts, plan for weaker ethanol offtake from oil firms next season and watch state advisory prices. Commuters should expect petrol blending policy to continue, but pump economics may reflect whichever feedstock is cheapest after the incentive tweak. Investors in agri-processing and OMC stocks should compare ethanol realisations with sugar export opportunities. Follow monsoon updates, Food Corporation rice allocations, and whether the government revises incentives before bids close.
Trade policy / exports
Commerce minister Piyush Goyal said on 22 October 2026 that India’s proposed free-trade agreement with the European Union could become operational within four to five months after signing, with the deal expected to be inked before year-end during his visit to Germany.
Food delivery / quick commerce
Swiggy reported on 22 October 2026 that September-quarter revenue rose 36% to about ₹7,571 crore and the consolidated net loss narrowed to ₹922 crore, as food delivery posted record adjusted core profit of about ₹349 crore while quick-commerce Instamart lost about ₹764 crore at the segment level amid heavier discounting and 69 new dark stores.
Quick-service restaurants / consumers
KFC and Pizza Hut operator Sapphire Foods India said on 22 October 2026 that September-quarter consolidated restaurant sales rose 20% year on year to about ₹885 crore, with KFC India same-store sales up 14% and adjusted EBITDA margin expanding 100 basis points to 7.1% even as the listed stock remained far below its 52-week high.
RBI / government borrowing
On 22 October 2026, the Reserve Bank of India accepted no bids at the scheduled sale of short-dated government treasury bills, the first full cancellation in about seven months, as investors demanded higher yields amid a bond selloff, oil-linked inflation fears, and expectations of more rate hikes after October’s policy minutes.
For informational purposes only. Not investment advice. Verify with filings and a licensed adviser.