Sugar Turns Bitter! Why Have Prices Soared by Up to 40%? Is ethanol production for blending in petrol to blame?
Lately, the sweetness of sugar has begun to leave a bitter taste in the common man's pocket. Sugar prices have risen by approximately 40% over the last three months. Sugar that was available for Rs 48 per kilogram a short while ago has now reached Rs 67–70 per kilogram.
The impact extends beyond just tea and coffee; it is also affecting the costs of sweets, bakery products, ice cream, and dining out at hotels and restaurants.
Fears of a future shortage
Why has sugar become so expensive? The primary reasons cited are dwindling sugar stocks and an imbalance between supply and demand. This season, the opening stock of sugar is estimated to be about 1.5 million tonnes lower than last year's. Consequently, fears of a future shortage have put upward pressure on prices.
Is ethanol production to blame?
Another major factor is ethanol production. Under the government's policy to increase ethanol blending in petrol, a significant portion of sugarcane is now being diverted to fuel production. This could reduce the availability of sugarcane for sugar manufacturing.
However, experts believe that ethanol is not the sole cause of the price hike; weather conditions, production levels, domestic demand, and government policies also play a role.
Govt faces a dual challenge
The government faces a dual challenge: it must advance the ethanol program for energy security while simultaneously ensuring adequate sugar availability in the domestic market. Measures such as imports and stock limits could help control prices if the need arises.
If sugar prices remain at this level during the upcoming festive season, various food items—including sweets—could become even more expensive. All eyes are now on the government's next move, sugar production figures, and market stock levels. These factors will determine whether sugar becomes 'sweet' again or if the bitterness of high prices persists in the days ahead.