In India, sugar prices have jumped 70 percent after a plunge in output to 14.7 million metric tonnes from last year’s supercrop of 28.5 miliion metric tons. The Indian government is warning that next year’s crop may be in the 20 million metric tonne range.
While sugar prices are floating to high levels, maintaining close to normal revenues, ethanol prices are fixed, and the low production of sugar will likely mean that little Indian sugar will be diverted to ethanol production. This will mean that, without significant ethanol importing, the government has little hope of meeting a national E5 target, much less a proposed E10 target scheduled to take effect this October. Ethanol is fixed by the government at $0.45 per liter.
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Joelle Brink | Jul 3, 2009 | Reply
It’s hard to say at the momemt because a weak monsoon was forecast this year but so far it has been only slightly less than average. El Nino events typically lead to a weak monsoon in India.
Based on long term forecasts http://www.sciencedaily.com/releases/2009/02/090227112307.htm , there’s no doubt that sugar producers will have to move to a more drought-tolerant crop. That’s why sweet sorghum was introduced a few years back. Tata Chemicals has a very successful sweet sorghum pilot plant in Nanded, Maharashtra, using technology supplied by Praj Industries, which says that the process is virtually the same as for sugar cane. Tata plans to build full scale sweet sorghum plants as quickly as possible.
One interesting result of climate change is that sugar and ethanol production may gradually shift from the flood plain of Bihar to dry Western India where sweet sorghum thrives best. This would also mean that processing will be done in modern, high capacity ethanol plants rather than the old sugar mills of Bihar,
On the other hand, this may put pressure on Bihar to modernize sugar production, which has changed little since the Raj, and introduce sweet sorghum in the dryer parts of the state.