Kurubur Shanthakumar, representing a sugarcane growers’ body, has called on authorities to permit jaggery units to produce ethanol, citing the diversion of sugarcane toward ethanol production by sugar factories as a key driver of rising sugar prices.
Shanthakumar attributed the upward pressure on sugar prices to what he described as “substantial profits” earned by sugar factories through ethanol production. The diversion of sugarcane feedstock toward ethanol, incentivized by government blending programs, has reduced the volume of cane available for sugar output, tightening domestic supply.
The demand to open ethanol production to jaggery units represents a push from agricultural stakeholders for broader participation in the biofuel value chain, which has until now been dominated by large-scale sugar mills.
Analysis:
The call from the sugarcane growers’ body highlights a structural tension within India’s ethanol blending program. While the policy aims to reduce fossil fuel dependence and stabilize the energy import bill, it also redirects sugarcane — a key food commodity — toward fuel use. When sugar mills find ethanol more profitable than refined sugar, the resulting supply squeeze can raise consumer prices for an essential household commodity.
Shanthakumar’s proposal to extend ethanol production rights to jaggery units could, if adopted, introduce additional supply-side capacity into the ethanol market. However, jaggery units typically operate at a smaller scale than integrated sugar mills, and questions remain about whether they possess the technical and regulatory infrastructure to meet ethanol quality and safety standards.
The broader issue reflects a recurring policy challenge: balancing energy security objectives with food price stability. Government policymakers have previously intervened in the ethanol-sugar nexus by capping or restricting diversion when sugar prices spike, signaling awareness of the trade-off. Whether authorities will respond to this latest demand from cane growers remains to be seen.
Sources:
– [The Hindu](https://www.thehindu.com/news/national/karnataka/sugar-price-rise-allow-jaggery-units-to-produce-ethanol-says-sugarcane-growers-body/article71381396.ece)
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Story synopsis gathered from: The Hindu – National — source
