This article argues that given better margins and high sugar prices, “cane-based distilleries are more likely to process ethanol from B-heavy and C-heavy molasses, and not directly from cane juice or sugar syrup”.
Govt policy may simply be going with the market flow or at least trying not to obstruct it.
Prerna Sharma Singh, the author of the article, and director of a policy research firm, suggests removing controls on sugar. She says
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artificially cheap sugar has health consequences
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sugar has little weight in inflation, unlike cereals and horticulture.
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larger future output requires higher capex. Denying access to profitable export markets will reduce the capex ramp-up. And will make price management harder in future.
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export curb announcement signals shortages and leads to hoarding and higher sugar prices.
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frequent export curbs create complications for foreign buyers and make India an unreliable supplier.
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export curbs will not improve the supply for ethanol processing.
Therefore, export curbs have negative short-term and long-term implications.
Removing curbs will improve price realisation and ensure timely payment to the farmers
Link to article: Why India needs to relax curbs on sugar export
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