India’s Sugar Produce Likely To Drop By 3.5% To 32.8 Million Tonnes, Could Limit Exports

India is projected to produce 32.8 million tonnes of sugar in the marketing year of 2022-2023, which is 3.5% lower than the earlier forecast due to a decline in sugar cane yields in major producing states because of irregular weather conditions. Sugar output shortfalls might limit India, the world's second-largest exporter, raise global prices, and allow competitors like Brazil and Thailand to increase shipments.

Aditya Jhunjhunwala, President of the Indian Sugar Mills Association (ISMA), stated that rainfall was erratic, and the sugar cane crop did not get enough rainfall during the growth stage and received too much when it was not needed.

In January, the ISMA predicted India would produce 34 million tonnes of sugar in the current season, after harvesting a record 35.8 million tonnes in the previous season, while expecting output of 36.5 million tonnes at the start of the season in October 2022.

The decreased production impacted the top-producing Maharashtra state, which saw its output decrease to 10.5 million tonnes from 13.7 million tonnes a year ago. Jhunjhunwala stated that this reduction would not leave any room for additional exports from the country. The government of India only permitted mills to export 6.1 million tonnes of sugar in the 2022-2023 season.

Still, there are reports that Prime Minister Narendra Modi's administration might allow a second tranche of shipments.

India exported a record 11.2 million tonnes of sugar in the previous 2021-2022 season, and the country mainly exports sugar to Indonesia, Bangladesh, Malaysia, Sudan, Somalia, and the United Arab Emirates.

Despite the decrease in sugar production, there are ample supplies in India to fulfil local consumption of 27.5 million tonnes, according to Jhunjhunwala. The country might begin the 2022-2023 marketing year on Oct. 1 with carry-forward stocks of 6.2 million tonnes, down from 7 million tonnes this season. Reuters was the first to report on the predicted reduction in sugar production in December.

Source-Reuters

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