Sugar raw material prices rose faster than final product in last 5 years
Oil marketing companies (OMCs) have prioritized ethanol from cooperative sugar factories in their second tender for 2024-25, seeking 0.88 billion litres. The first tender saw bids for 9.16 billion litres, with 8.37 billion litres accepted. An Infomerics Ratings report highlights a price disparity: while sugarcane prices rose 26% over five years, sugar prices increased only 13%. Molasses prices surged 45.7%, driven by ethanol demand, reflecting uneven price growth in the sugar value chain.
The oil marketing companies (OMCs) in their second tender for supply of 0.88 billion litres of ethanol in 2024-25 supply year have for the first time said that preference would be given to ethanol produced from cooperative sugar factories, officials said. In the first tender, bids for supply of 9.16 billion litres of ethanol were received of which 8.37 billion litres was accepted. Meanwhile, a report by Infomerics Ratings showed that in the past five financial years (FY), the Wholesale Price Index (WPI) rose by 24.3 per cent, while WPI Food Index increased by 21.8 per cent. In the same period, prices of sugarcane grew 26 per cent, while sugar prices have only grown by 13 per cent. This represents a dichotomy where wholesale prices of raw material rose at a faster rate compared to the prices of final goods, the report said. In case of by-products, prices of molasses have increased by 45.7 per cent over the past five financial years, largely due to rising use of molasses in the ethanol programme.
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Source : Business Standard
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