Effect of Changes in World Ethanol Prices on Indonesian Sugar Industry

M. Emil Rahman, Bonar M. Sinaga, . Harianto, Sri Hery Susilowati

Abstract


The use of alternative fuels in the form of biofuels from sugar cane is used as an opportunity for sugar cane producing countries. Brazil is the largest country producing sugar cane, which allocates sugar cane for raw materials for sugar and ethanol, changes in ethanol prices can affect the availability of sugar in world market. This study aims to analyze the changes in world ethanol prices on Indonesian sugar industry.  The results showed that when world ethanol prices declined Brazil will allocate sugar cane to produce sugar, it would reduce the performance of the Indonesian sugar industry from upstream to downstream. Whereas when prices increased the availability of sugar in world markets will decline so that the price of sugar will increase, it would improve the performance of the Indonesian sugar industry.

Keywords


ethanol prices, sugar cane, sugar, world market

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DOI: http://dx.doi.org/10.52155/ijpsat.v15.1.1018

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