1 week ago
Experts Reject Ethanol Link as Sugar Prices Soar
Sugar has become much more expensive in parts of India.
Experts say there is less sugarcane being grown and harvested than before.
Some traders also bought and stored large amounts of sugar, which may have pushed prices higher.
Sugar factories in Maharashtra are operating for fewer days because producing sugar has become less profitable.
One industry leader said ethanol production is not the main reason for the price increase.
He said a smaller share of ethanol now comes from sugar, while foodgrains provide a larger share.
Opposition parties blame increased ethanol blending for making sugar costlier.
The government disagrees and says the country has enough sugar and that industry groups are driving up prices.
Loose sugar prices in Chhatrapati Sambhajinagar rose to Rs 75-80 per kg.
Experts attributed the increase to lower sugarcane output, reduced crushing and trader stockpiling.
West Indian Sugar Mills Association president Bhairavnath Thombre said ethanol diversion was not the main cause.
Sugarcane cultivation area fell from 5,885.32 thousand hectares in 2022-23 to 5,449.93 thousand hectares in 2024-25.
The government rejected the ethanol-related allegations and blamed the industry for raising prices despite sufficient domestic stocks.
- Who
- Sugar industry experts, traders, opposition parties and the Union government are involved in the debate.
- What
- Sugar prices have risen sharply, with experts citing lower cane production and stockpiling rather than ethanol diversion as the main causes.
- Where
- The reported retail price increase occurred in Chhatrapati Sambhajinagar, Maharashtra, India.
- When
- The report was dated August 23; cultivation and production figures compare 2022-23 with 2024-25.
- Why
- Experts cited declining sugarcane output, shorter crushing seasons, the gap between farmer payments and sugar prices, export permissions and trader stockpiling.
Experts and Opposition Parties
Union Government
Cause of rising sugar prices
Experts and Opposition Parties
Experts said declining sugarcane production, shorter crushing seasons and trader stockpiling were driving prices; opposition parties alleged that ethanol blending was also contributing.
Union Government
The government rejected the ethanol-related claims and said the industry was increasing prices despite sufficient stocks to meet domestic demand.
Role of ethanol production
Experts and Opposition Parties
Opposition parties argued that increased ethanol blending diverted sugar and imposed an additional financial burden on consumers, while industry experts said ethanol diversion was not the main cause.
Union Government
The government rejected the allegation that ethanol policy was responsible for the price increase.
Availability of sugar
Experts and Opposition Parties
Experts called for the government to recheck sugar stocks and said lower production and permitted exports had affected domestic prices.
Union Government
The government maintained that the country had sufficient stocks for domestic demand.
Key facts
- Reported sugar price
- Rs 75-80 per kg for loose sugar in Chhatrapati Sambhajinagar.
- Sugarcane cultivation area
- Reduced from 5,885.32 thousand hectares in 2022-23 to 5,449.93 thousand hectares in 2024-25.
- Sugarcane production
- Declined from 490,533.35 thousand tonnes in 2022-23 to 453,158.40 thousand tonnes.
- Sugar production
- Reported at 454,610.97 thousand tonnes in 2024-25.
- Ethanol from sugar diversion
- According to Bhairavnath Thombre, the share fell from 100% in 2020 to about 30%.
- Maharashtra crushing season
- Some factories reduced operations from about 150 days annually to nearly 100 days.
- Prices paid and received
- The FRP paid to farmers was cited as Rs 3,650 per tonne, compared with an MSP for sugar of Rs 3,100.
Quotes
Jayprakash Dandegaonkar
Former president of the National Federation of Cooperative Sugar Factories
“The sugarcane production in India is declining. The tonnage is also declining to some extent, which is affecting overall sugar production. Even if the government frames a new policy to increase production, it will take around 30-36 months to show results. The number of key sugarcane producing states is also decreasing. The government needs to check the stocks of sugar again.”
telegraphindia.com
theprint.in
“The span of sugarcane crushing in Maharashtra has also gone down. Factories that crushed sugarcane for around 150 days a year have reduced the season to nearly 100 days as the business is no longer affordable. We are paying farmers a Fair and Remunerative Price (FRP) of Rs 3,650 per tonne, while the Minimum Support Price (MSP) for sugar is Rs 3,100.”
telegraphindia.com
theprint.in
Sources
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