Question

In what ways is the market for sugar used in confectionery related to the market for ethanol?

Answer 1

Answer:

Ethanol is usually produced by sugar factories that use sugarcane juice or molasses to make ethanol. Shortly after crushing, the cane juice is fed directly into the fermentation container (it is perishable) to form ethanol, while the molasses is first diluted before fermentation. In pure sugar work, sugar is made by crystals from sugarcane juice in a series of "strikes".

Sugar factories supply the basic raw materials for the production of ethanol as well as other alcohols: starch and glucose. The production of ethanol and sugar competes for the same raw material and the total acreage for sugarcane production is fixed, at least in a short period of time, it is straightforward that an increase in the price of a commodity will divert resources from other products. Commodities increase the quarterly price of a product. And this leads to an increase in the price of these items. Thus, the prices of two commodities are expected to move in the same direction. Ethanol production is favorable compared to sugar due to high demand for ethanol locally till 2008 and low price of sugar in the international market. Since the ethanol market is closely related to the sugar market and the oil market, the changes in the sugar or oil market are likely to have a major impact on the ethanol market. The rise in international sugar prices from the 2008 market diverted sugarcane from ethanol production to sugar production, thus reducing the supply of ethanol in the domestic market.