India Weighs Diverting 3 Million Tons From Ethanol to Sugar as Prices Hit Record High
Updated
Updated · Yahoo Finance · Aug 10
India Weighs Diverting 3 Million Tons From Ethanol to Sugar as Prices Hit Record High
2 articles · Updated · Yahoo Finance · Aug 10
Summary
India is considering curbing sugarcane use for ethanol from October, with a decision possible by end-September, to lift sugar output and cool record domestic prices.
About 3 million metric tons of sugar—roughly 10% of annual output—was diverted to ethanol this year, and keeping a similar volume in the food market could offset weaker production after poor rains in Maharashtra and Karnataka.
The plan would ask mills to stop making ethanol from cane juice and B-heavy molasses, while allowing production mainly from C-heavy molasses; fuel retailers would tender for next season's ethanol after allocations are finalized.
Sugar prices have climbed about 10% in the past month and are expected to stay elevated for at least three more months as supplies tighten and festival-season demand rises.
New Delhi has already banned sugar exports and capped dealer stockholding, and any ethanol shortfall could be covered with corn and rice as India tries to keep its 20% petrol-blending target on track.