A decision regarding ethanol is likely to be taken in the cabinet on Wednesday, source said.

On December 18, the ministry of food had reversed the ban on using sugarcane juice to make ethanol. Prior to this, the government had set a cap at 1.2 million tonne for the amount of sugarcane that could be diverted for ethanol production. The limit was raised to 1.7 million tonne in December. The same would be reviewed every month.

The Centre had maintained that the previous cap was in place to maintain adequate sugar availability for domestic consumption and to keep prices under check. Consumer Affiars Secretary Rohit Kumar Singh in December had also said the key criterion was the domestic availability of sugar.

India is envisaging achieving 20% ethanol blending by 2025 and reducing its reliance on fossil fuels to address environmental concerns.

In June 2022, Prime Minister Narendra Modi had said India had achieved the target of 10% ethanol blending in petrol, five months ahead of schedule, thereby cutting down carbon emissions by 27 lakh tonne.

Tuesday’s report has put sugar stocks such as Balrampur Chini, Praj Industries, Dhampur Sugar, Sakthi Sugars, Dwarikesh Sugar, in focus, which were largely off their day’s lows.