The Sugar Price Spike Isn't About Ethanol - Here's What the Government's Own Numbers Show

The Sugar Price Spike Isn't About Ethanol

• Here's What the Government's Own Numbers Show A ₹20-per-kg jump in a month sounds like a single number, but it lands completely differently depending on who is paying it. For a bulk confectionery maker, it is a renegotiated supply contract. For the family in Odisha paying the country's highest price - ₹64.72 a kilo, ₹17.80 more than a year ago - it is a line item that just ate into whatever else that money was meant to do. The political fight over who caused this obscures a much more specific, checkable mechanism.

The Number That Should End the Ethanol-Blame Argument Congress and

AAP both pointed to ethanol diversion as the culprit. The government's own data says the opposite happened: the share of sugarcane diverted to ethanol fell from around 12% in 2022-23 to around 9% in 2025-26. Even the raw volume - 30 lakh tonnes of cane diverted this season - is dwarfed by a separate number: gross sugar production came in 34.5 lakh tonnes below the industry's own November estimate, before a single tonne of that diversion is even counted.

The shortfall happened upstream of the ethanol question entirely.

Where the Real Shortfall Actually Came From

The mechanism is agronomic, not policy-driven: the Co-0238 sugarcane variety, which dominates Uttar Pradesh's cane acreage, has grown increasingly vulnerable to red rot disease and the top shoot borer pest - cutting UP's output to 89.7 lakh tonnes against an expected 103.2 lakh tonnes.

Simultaneously, excess rainfall and a delayed monsoon withdrawal waterlogged cane fields in Maharashtra and Karnataka, denying the crop the sunlight and aeration it needs to build sucrose. Two states that were expected to produce 130 lt and 63.5 lt instead delivered 99.2 lt and 47.2 lt.

This is what actually shrank the sugar available to Indian households - a biological vulnerability concentrated in one dominant variety, not a fuel-policy tradeoff.

What the Government's Response Actually Fixes

• and Doesn't The TRQ import allowance, export ban and 400-tonne dealer stock limits are all demand-side and distribution-side interventions - they manage how existing (reduced) sugar reaches the market faster and more evenly. None of them address the agronomic root: continued heavy reliance on a single, increasingly disease-prone cane variety. Unless India diversifies the varieties farmers plant, the same shock is available to repeat itself next season, ethanol policy unchanged either way. For the exam, the transferable insight is this: a price spike blamed on a visible, politically convenient policy (ethanol blending) can have its actual root cause sitting one step further upstream, in a narrower, less visible vulnerability - here, a single dominant crop variety's disease exposure - that price-stabilisation tools like TRQ and stock limits can manage but never actually fix.