India is the largest sugar exporter and second largest sugar producer in the world. It ranks behind Brazil in terms of sugar production and owing to favorable weather conditions and ample rainfall, the country exports bulk sugar to over 50 countries around the world, while ensuring adequate stocks for domestic consumption.
Bumper sugar harvest year after year, helps India export bulk sugar to 50+ countries around the world. However, things might be different this time around.
According to industry body, Indian Sugar Mills Association (ISMA), India’s sugar harvest is likely to be 32.8 million tonnes this marketing season, down 3.5% as compared to ISMA’s previous forecast.
ISMA’s Sugar Forecasts
At the start of the current sugar marketing season in October, the ISMA expected India’s sugar output to be 36.5 million tonnes.
However, three months later, in January, the ISMA dropped it domestic production forecast to 34 million tonnes for the current season.
Again now, taking into account erratic rainfall in different sugar producing states of the country, the ISMA has revised India’s sugar output for the current season at 32.8 million tonnes, down 3.5% as compared to its previous forecast.
Reasons Behind Drop In India’s Sugar Production Forecasts
Owing to bad weather conditions, India’s sugar output is predicted to be low this year.
In the last marketing season, India harvested a record 35.8 million tonnes of sugar. However, bad weather has trimmed India’s sugar output this season.
Mr. Aditya Jhunjhunwala, president of the Indian Sugar Mills Association (ISMA), said that the rainfall was erratic this year and as a result, sugarcane crops did not get ample rainfall during their growth stage and got way too much, at the time of harvesting.
Owing to bad weather, Maharashtra-the top sugarcane producing state in India is forecasted to produce 10.5 million tonnes of sugar, 3.2 million tonnes less than the previous year’s production figure.
Lower Sugar Output Could Limit India’s Exports
Reduced sugar output from the largest sugar exporter can act as a hindrance for India in boosting its sugar exports. This can provide Brazil and Thailand opportunities to capitalize on the surging sugar prices in the global market.
India has so far allowed sugar exports to the tune of 6.1 million metric tonnes for the current marketing season and was expected to allow a second tranche of shipments. However, India’s reduced sugar output has made people anxious in that regard.
The Bottom Line
Located in Asia, India is the largest sugar exporter and second largest sugar producer in the world. Enjoying bumper sugar harvest every year, India is able to ship record volumes of the sweetener to 50+ countries across the globe. However, ISMA’s forecasts of a reduced sugar output this season might limit India from exporting bulk sugar this marketing season.
Owing to bad weather and erratic rainfall, ISMA has reduced its sugar forecast for the current marketing season to 32.8 million tonnes, down 1.2 million tonnes as compared to its January forecast. This can restrict the GOI from allowing a second tranche of shipments of sugar.
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