Sugar prices hit record high! Government planning to cut sugarcane use for Ethanol

According to reports from OTV, the Indian government is currently evaluating a proposal to restrict the diversion of sugarcane for ethanol production starting in October. This potential policy shift comes as the country faces a sharp rise in domestic sugar prices, which have reached record levels in recent weeks. Officials are reportedly concerned about the impact of poor rainfall on the upcoming season's sugar output and are seeking to ensure adequate supply for the domestic market ahead of the busy festival season.

During the current season, approximately 3 million tonnes of sugar were diverted toward the production of ethanol, representing roughly 10% of India's total sugar output. By limiting this diversion, the government aims to bolster domestic stocks and stabilize prices. The move reflects a broader effort to balance the country's ambitious renewable energy targets with the immediate need to maintain food security and control inflation for essential commodities.

While the government has not yet issued a formal decree, the consideration of such measures highlights the volatility in the agricultural sector caused by climate-related factors. Market analysts suggest that if the restriction is implemented, it could provide a necessary buffer against supply shortages. The situation remains fluid as stakeholders in both the sugar and energy sectors await further clarification from the Centre regarding the final policy framework.