Policy mistakes, not ethanol, are behind sugar price rise

Sugar has always been a political commodity in India. It has become more so with the rise in retail prices — from an average of Rs 45 to Rs 65 per kg within a month —  that is being blamed on the ethanol-blended petrol programme. The truth is more complex — and bitter. Only 27.5 per cent of ethanol supplied by distilleries to oil marketing companies in 2025-26 is being produced from sugarcane juice and molasses; the balance is coming from cereal grains. Also, the estimated 3 million tonnes (mt) of sugar diverted for making ethanol would be hardly a tenth of the 30.9 mt gross production during the year ended September 2026. The preceding four sugar years had also seen diversions of 3.5 mt, 2.4 mt, 4.3 mt and 3.6 mt respectively, but without causing price spikes. Ethanol per se clearly isn’t the villain here.

The current price spiral has more to do with sugar output itself turning out much lower — from an initial 34.4 mt gross projection made at the start of crushing in November. The shortfall of 3.5 mt should have been anticipated much earlier — at least by February, when mills in Uttar Pradesh and Maharashtra were struggling to get cane and even shutting down crushing operations. The government was late to react. It banned exports in mid-May. When ex-factory prices started really soaring from July, as deficient June monsoon rains raised concerns over cane yields and production prospects for the upcoming 2026-27 sugar year too, it went into overdrive. A stock limit of 400 tonnes, along with the condition of not holding any sugar beyond 30 days, was imposed on all dealers. Mills were further, as part of a stock verification exercise, directed to furnish details of all bulk consumers to whom they had sold 500 tonnes or more. These knee-jerk panic actions only added fuel to the fire.

Overall Analysis

The editorial challenges the popular belief that the ethanol-blended petrol programme is responsible for the sharp rise in sugar prices. The author argues that the real reason is not ethanol diversion but lower-than-expected sugar production and delayed government action.

The opening sentence, “Sugar has always been a political commodity in India,” immediately establishes the broader context. The phrase “political commodity” suggests that sugar is not merely an agricultural product but also has strong political and economic importance. The author then presents price figures to show the seriousness of the situation. However, instead of accepting the commonly blamed cause, the editorial uses facts, percentages and production figures to challenge that assumption. The statement “The truth is more complex — and bitter” creates contrast and prepares the reader for an alternative explanation.

The author then uses quantitative evidence to weaken the argument against ethanol. Only a relatively small share of ethanol comes from sugarcane juice and molasses, while much comes from cereal grains. Similarly, the quantity of sugar diverted for ethanol is presented in comparison with total sugar production. The comparison with previous years is particularly effective: similar quantities were diverted earlier without causing such price increases. The concluding sentence of the paragraph — “Ethanol per se isn’t the villain here” — is a strong rhetorical statement. “Per se” means “in itself” or “by itself.” The author therefore distinguishes between ethanol production as a policy and the actual causes of the current crisis.

The second paragraph shifts from identifying the wrong cause to identifying the real policy failures. The author points out that sugar production was significantly below the government’s initial projection. More importantly, the government allegedly failed to recognise the emerging shortage early enough. References to mills struggling to obtain sugarcane and shutting down operations are used as evidence that warning signs were already visible.

The language becomes increasingly critical when discussing government action. Expressions such as “late to react,” “went into overdrive,” “knee-jerk panic actions,” and “added fuel to the fire” convey strong disapproval. These are examples of figurative and idiomatic language commonly used in editorials. “Knee-jerk actions” means immediate reactions made without sufficient thought or planning. The author suggests that instead of solving the underlying supply problem, sudden restrictions may have increased uncertainty and worsened the situation.

Overall, the editorial follows a clear argumentative structure: reject the popular explanation → provide evidence → identify the actual problem → criticise the government’s response. The writing combines economic data with idiomatic expressions, making the argument both evidence-based and engaging.

📚 Important Vocabulary – 5

1. Commodity – a basic product that can be bought and sold, especially in large quantities.
2. Diversion – the act of using something for a different purpose from its original or intended use.
3. Deficient – insufficient; lacking in the required amount.
4. Knee-jerk – an immediate reaction made without careful thought.
5. Per se – by itself; in itself, without considering other factors.

Conclusion & Tone

The editorial concludes that ethanol should not be blamed for the rise in sugar prices. The deeper problems are lower sugar production, failure to recognise the shortage early, and poorly timed government interventions. The author believes that panic-driven policy measures can aggravate rather than solve a market crisis.

Tone: Analytical, critical, evidence-based and strongly disapproving of the government’s delayed and reactive policymaking.