CPI(M) Blames Ethanol Policy for Rising Indian Sugar Prices

The Communist Party of India (Marxist) has accused the BJP-led central government of causing a surge in sugar prices by diverting sugarcane for ethanol production. The party warned that the price hike would negatively impact the Raksha Bandhan festival on August 28, noting that prices in Bhopal rose to Rs 70 per kg and reached Rs 75-80 per kg in Chhatrapati Sambhajinagar.

The Government of India rejected these claims, asserting that domestic stocks are sufficient and attributing the price increases to industry stockpiling. The West Indian Sugar Mills Association supported this view, stating that the share of sugar diverted for ethanol has dropped from 100% in 2020 to approximately 30%. The association suggested that trader stockpiling in anticipation of El Nino effects and inaccurate production estimates are the primary drivers.

Industry experts and former officials provided alternative explanations for the volatility. They cited declining sugarcane yields, a shrinking number of producing states, and a shorter crushing season in Maharashtra as the root causes of the price rise.