Sugar stocks tumble as govt bars sugar-based ethanol

Sugar stocks came under sharp pressure on Tuesday after the government excluded sugar-based ethanol from the latest procurement tender for the 2026-27 supply year, a move aimed at safeguarding domestic sugar supplies. The decision coincides with a reduction in incentives for maize-based ethanol as authorities balance the push to maintain the 20% ethanol blending target in petrol. The exclusion of sugarcane-based ethanol is expected to limit diversion of sugar towards fuel production, supporting inventory levels and prices of the sweetener. At the same time, the cut in maize ethanol incentives signals a more measured approach to feedstock use amid ongoing efforts to scale up blending without straining food security.