# Bioethanol: Cycles

Boom, bankruptcy and the price sandwich between crops and petrol

Source page: https://www.materialinsights.org/energy/bioethanol/cycles/

What this tab covers How its prices and margins move: past booms and busts with price levels, the spread or margin that the industry watches, the drivers of the cycle and the metrics to track.

Ethanol trades between two anchors: the feedstock (maize, cane or rice) sets the floor and petrol sets the ceiling, because blenders will not pay much over energy and octane value without a mandate. Mandates and credits (RINs, LCFS, CBIOs) fill the gap. In the US, margins swing with the maize-ethanol crush spread; in Brazil, mills switch between sugar and ethanol; in India, the government sets prices by feedstock and decides each year which feedstocks may be used. Droughts, oil price shocks and policy changes cause the big moves.
 The spread to watch **Ethanol crush margin (US) and administered price minus feedstock cost (India)**

US: ethanol price x about 2.9 gallons plus DDGS and corn oil per bushel, minus the maize price and gas cost. India: Rs 68.86 per litre maize-ethanol price against about Rs 56-63 per litre of maize at Rs 2,400 per quintal before DDGS credit (derived, indicative), which is why AIDA calls grain economics stressed.

#### Booms and busts

1. 2006-2008

US mandates (2005 and 2007 laws) and high oil prices triggered a plant-building boom; maize and food prices spiked, then the financial crisis bankrupted several producers.

not retrieved; maize roughly doubled (maize tile)

2. 2012

The US drought cut the maize crop; ethanol plants idled on negative crush margins while mandates held demand.

not retrieved (maize tile describes the drought)

3. 2020-2022

Covid cut petrol demand and ethanol output; the 2021-22 commodity spike and war in Ukraine then lifted ethanol, maize and petrol together.

not retrieved in sources used

4. Dec 2023-2024

India limited cane juice and B-heavy molasses for ethanol and paused FCI rice, cutting the blend rate to about 11.5% expected for 2024; maize became the main feedstock.

blend target E20; USDA forecast 6.35 billion litres output in 2024 (USDA FAS GAIN IN2024-0024)

5. Oct 2026

OMCs barred sugar-based ethanol from the ESY 2026-27 tender after weak rains in Maharashtra and Karnataka, and cut the maize incentive.

maize ethanol Rs 68.86 per litre, down from Rs 71.86; FCI rice Rs 60.32; C-heavy Rs 57.97 (ThePrint, Oct 2026)

#### What drives the cycle

- **Mandates and credits.** RFS volumes and RIN prices, Brazil's blend level and CBIOs, India's OMC prices and EU RED targets decide most demand and margins.
- **Feedstock harvests.** US maize yields, Brazil's cane crush and Indian monsoon-driven sugar output move feedstock costs and, in India, which feedstocks are allowed.
- **Oil and petrol prices.** Petrol sets ethanol's value outside mandates and Brazil's hydrous parity at about 70% of the petrol pump price (indicative).
- **Grain stock policy in India.** FCI rice sales price and volume make rice ethanol viable or not; 6.35 Mt was sold in 2025-26.

#### Metrics to track

| Metric | Why it matters | Where to track it |
|---|---|---|
| **EIA weekly US ethanol production and stocks** | fastest read on US supply | EIA |
| **D6 RIN price** | value of conventional ethanol compliance | EPA EMTS; OPIS, Argus |
| **OMC tender allocation and supply by feedstock** | India's demand and feedstock mix | OMC/MoPNG releases via trade press |
| **UNICA fortnightly crush and sugar mix** | Brazil's sugar-ethanol switching | UNICA |
| **CEPEA/ESALQ hydrous and anhydrous ethanol indicators** | Brazilian spot prices | CEPEA |

## Other sections

- [Summary](https://www.materialinsights.org/energy/bioethanol/index.md)
- [Energy overview](https://www.materialinsights.org/energy/bioethanol/energy/index.md)
- [Correlation](https://www.materialinsights.org/energy/bioethanol/correlation/index.md)
- [Efficiency](https://www.materialinsights.org/energy/bioethanol/efficiency/index.md)
- [Techniques](https://www.materialinsights.org/energy/bioethanol/techniques/index.md)
- [Resources and labour](https://www.materialinsights.org/energy/bioethanol/resources/index.md)
- [Impact on the biosphere](https://www.materialinsights.org/energy/bioethanol/biosphere/index.md)
- [Overview](https://www.materialinsights.org/energy/bioethanol/overview/index.md)
- [Production route](https://www.materialinsights.org/energy/bioethanol/routes/index.md)
- [Production](https://www.materialinsights.org/energy/bioethanol/production/index.md)
- [Feedstocks](https://www.materialinsights.org/energy/bioethanol/feedstocks/index.md)
- [Trading](https://www.materialinsights.org/energy/bioethanol/trading/index.md)
- [Movement](https://www.materialinsights.org/energy/bioethanol/movement/index.md)
- [Regulation](https://www.materialinsights.org/energy/bioethanol/regulation/index.md)
- [Characteristics](https://www.materialinsights.org/energy/bioethanol/characteristics/index.md)
- [Emissions](https://www.materialinsights.org/energy/bioethanol/emissions/index.md)
- [Relationships](https://www.materialinsights.org/energy/bioethanol/links/index.md)