Sugar availability likely to be affected due to increased use in ethanol production
14-May-2025 04:03 PM
Mumbai. The government is placing strong emphasis on boosting ethanol production for blending with petrol, leading to increased use of sugar in ethanol manufacturing.
As a result, the availability of sugar for food and industrial use is expected to decline, and prices may remain elevated.
The government aims to raise ethanol blending in petrol to 30 percent to reduce dependence on imported crude oil. The earlier target was 20 percent blending, which is expected to be achieved by 2025.
To meet the 30 percent blending goal, sugarcane use for ethanol will need to rise significantly, potentially impacting sugar output.
Since 2022, domestic sugarcane production has shown a declining trend, raising concerns about future sugar availability. To encourage farmers, the Central Government has increased the Fair and Remunerative Price (FRP) of sugarcane by Rs 15, from Rs 340 to Rs 355 per quintal for the 2025-26 marketing season (October–September).
A good increase in sugarcane output would help, but if it does not materialize, sugar production could fall again.
During the current 2024-25 marketing season, domestic sugar production is expected to drop by about 60 lakh tonnes to around 260 lakh tonnes compared to 2023-24.
However, the industry had a substantial carryover stock, so meeting the domestic demand of 280-290 lakh tonnes should not be difficult this season.
The government has also allowed the export of 10 lakh tonnes of sugar. But in the next season, the industry's carryover stock will be low, which could create challenges in fulfilling domestic demand.
After a decline in the 2016-17 season, sugarcane production increased steadily, reaching a record high of nearly 49 crore tonnes in 2022-23.
However, production has since fallen, dropping to around 43.50 crore tonnes in 2024-25. The production performance in the 2025-26 season will be crucial.
It will influence sugar availability and pricing and determine the government's strategy regarding sugarcane use for ethanol production.