India Weighs Sugarcane Restriction to Tame Record-High Sugar Prices
India is considering restricting sugarcane use for ethanol production to boost sugar output and curb record-high prices. Reduced rainfall in Maharashtra and Karnataka, the country's largest sugarcane-producing states, has raised concerns about next year's sugar output.
The government may restrict the amount of sugarcane used for ethanol production in the upcoming season, beginning October. This could add around 3 million metric tons of sugar to domestic supplies, offsetting the expected drop in output due to weak rains.
Indian sugar prices have risen about 10% over the last month to a record high and are expected to remain high for at least the next three months as supplies tighten. To keep its ethanol blending program on track, the government may need to increase the use of corn and rice for ethanol production.