Ethanol Blending Push Puts Pressure on Food Prices in India

India's push to blend ethanol into petrol has unintended consequences for food prices. The country aims to reduce dependence on imported crude oil and give farmers another source of income, but diverting crops like sugarcane and maize to make ethanol is causing shortages.

Low production estimates have led to a sugar shortage, with retail prices reaching ₹65-70 per kilogram in some markets. However, India has enough sugar reserves to cover the next crushing season, which starts in October.

Farmer leader Yudhvir Singh told The Wire that most growers had sold their sugarcane months before retail prices began climbing. Ethanol production is taking a larger share of maize supply, causing food inflation to rise. Wholesale maize has jumped 30% since May, and poultry feed has shot up from ₹25 in April to over ₹30.

The government is selling rice from public stocks to distilleries at subsidized rates, but using public grain reserves for fuel raises questions about food security and environmental costs. Shifting between crops like sugarcane, maize, and rice doesn't solve supply shortages; it just passes the pressure down the line.