Located in Asia, India is the second largest sugar exporter and producer in the world. The Asian nation exports bulk sugar every year to different countries around the world and owing to strong demand all year round, Indian Sugar Exporters earn good revenue year after year.
Thanks to bumper domestic sugar production, India is able to ship record volumes every year and meet global demand of the sweetener. Any effect on India’s sugar output reflect sharply on global sugar prices and the same has been the case this time as well. On reports of drop in India’s sugar output by the Indian Sugar Mills Association (ISMA), sugar prices rallied sharply on 5th of April 2023. On Wednesday, May NY world sugar closed 2.14 per cent higher, while May London white sugar closed 4.26 per cent higher.
India’s Sugar Production Drops By 3% In First Six Months Of 2022-23 Marketing Year
As reported by the industry body, Indian Sugar Mills Association (ISMA), India’s sugar output dropped by 3 per cent and stood at 299.6 lakh tonnes in first six month of current marketing year. This has been a result of decreased sugar production in Maharashtra and Karnataka.
While sugar production in Uttar Pradesh rose from 87.5 lakh tonnes to 89 lakh tonnes, sugar production in Maharashtra fell to 104.2 lakh tonnes from 118.8 lakh tonnes earlier.
The same has been the case with Karnataka as well. The sugar production of the state declined to 55.2 lakh tonnes from 57.2 lakh tonnes earlier.
Sugar Futures Rose
As soon as Indian Sugar Mills Association (ISMA) reported that the world’s second largest sugar exporter and producer witnessed a drop in production to 29.96 MMT during the first six months of 2022-23 marketing year, global sugar prices rose sharply.
On Wednesday, May NY world sugar closed +0.48 (2.14 per cent higher) and May London white sugar closed +27.10 (4.26 per cent higher). A comparison with the data of previous years is enough to establish the fact that May NY world sugar posted 6-1/2 year high, while London white sugar posted an 11 year high.
The Bottom Line
Located in Asia, India is the second largest sugar exporter in the world. It exports sugar to a number of nations across the globe including Malaysia, Indonesia and Saudi Arabia and any impact on India’s sugar output reflect directly on global sugar prices.
This time as well as soon as industry body, Indian Sugar Mills Association (ISMA) reported that India witnessed a 3 per cent drop in production during the first six months of current marketing year, sugar prices rallied sharply with May NY world sugar closing 2.14 per cent higher, and May London white sugar closing 4.26 per cent higher.
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