# Ethanol restrictions, higher sugarcane costs to drag Indian mills' operating margins to 6%

> Indian sugar mills' operating margins are expected to contract by 140–160 basis points to about 6% this fiscal, despite projected operating-income growth of 4–5%. For ethanol supply year 2027, production from sugar-based feedstocks has been restricted to C-heavy molasses; sugar output is forecast at about 29 million tonnes, down from 31.1 million a year earlier, partly due to weather concerns affecting cane yields.

- Date: 2026-11-10 · published 2026-11-10T15:19:03.977Z
- Category: policy · region India · magnitude medium
- Page: https://feedsoft.ai/events/91975-ethanol-restrictions-higher-sugarcane-costs-to-drag-indian-mills-operating
- Commodities: [Ethanol](https://feedsoft.ai/c/ETHANOL.md)

## Why it matters

Restricting sugar-based ethanol limits mills' ability to divert sugar into a higher-margin outlet, potentially increasing sugar available to the domestic market; the projected smaller crop and steady consumption nevertheless point to a tight balance. The policy change also curbs demand for sugarcane as an ethanol feedstock.

## Read by commodity

- ETHANOL: bearish ▼

## Sources

- telegraphindia.com: https://www.telegraphindia.com/business/ethanol-restrictions-higher-sugarcane-costs-to-drag-indian-mills-operating-margins-to-6-per-cent/cid/2188797

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Data from Feedsoft AI (https://feedsoft.ai/). For information only; not investment advice.